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Apple Insider's Hoax E-Mail Triggers $4B Stock Scramble

By Tim Gray MacNewsWorld ECT News Network
May 17, 2007 11:51 AM PT

Apple shares rebounded on Thursday after tumbling nearly 3 percent Wednesday under the weight of false rumors regarding product delays.

Apple Insider's Hoax E-Mail Triggers $4B Stock Scramble

The precipitous drop began when technology news blog Engadget.com reported that Apple was planning to postpone the launch of both its much-anticipated iPhone and the next version of its Mac OS X operating system, Leopard.

Ryan Block, the post's author, initially cited an "authority" as a source providing news of the supposed delays. The information was soon discovered to be bogus -- but not soon enough to prevent some major financial ramifications.

The loss attributed to the post was estimated at approximately US$4 billion.

"This one doesn't bode well for Mac fans and the iPhone-hopeful: We have it on authority that as of today, the iPhone launch is being pushed back from June to ... October (!), and Leopard is again seeing a delay, this time being pushed all the way back to January," Block wrote.

Getting to Market

The Cupertino, Calif.-based company's stock almost immediately plunged nearly 3 percent to $104 as investors voiced concerns over the possibility of another round of delays for the OS, as well as worries over moving the iPhone debut past its scheduled late June date.

However, Apple released a statement refuting the rumors, insisting the product launches were still on schedule.

"Apple is new to the mobile and wireless market, so it's not unreasonable to believe that the iPhone might be delayed," Zippy Aima, an analyst with Frost & Sullivan, told MacNewsWorld. Its first jump into the space might be slowed by regulatory compliance and "trying to ensure the product meets relevant standards."

A Leopard delay could be more significant, Aima said, and that report was likely what caused the skittishness among investors.

Phony Memo

It appears the "authority" cited in the blog was actually a fake memo circulated within Apple and then forwarded to Engadget.com.

The e-mail claimed the company was issuing a press release stating the iPhone had been pushed back to October, and Leopard would be delayed until January.

Apple conceded the phony e-mail came from within its headquarters but did not identify the culprit. It emphasized that the iPhone would arrive on schedule in June and that Leopard is on track for its planned October 1 release.

Unhappy Investors

Although Apple has squelched the rumors, many investors aren't happy with Engadget over its role in spreading the hoax, which resulted in adverse effects on many portfolios.

Posts on Engadget.com and Apple's investor boards charged the blog of shoddy journalism, costing many investors a lot of money. Apple's stock has since regained the lost ground.

How do you feel about government regulation of the U.S. tech industry?
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