Engadget Blunder Sends Apple Stock Falling

A fake e-mail, which Engadget picked up and reported as news, triggered a massive Apple sell off within 15 minutes.

Spoof e-mails seldom cause more than a ripple in the ocean of Internet news, spreading through forums and blogs, and generally being regarded with skepticism. Unless, of course, Engadget accidentally picks one up. Then you have a tsunami.

That’s precisely what happened Wednesday when Engadget falsely reported that Apple was delaying two of its most anticipated products, Leopard OS X and the iPhone, based on a fake e-mail that appeared to come directly from Apple. The news generated more than confusion among Apple fans – it caused the company’s stock to plummet 2.2 percent in a matter of minutes.

The original story read, “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.” It was posted at 11:49 a.m. EST, and 13 minutes later Apple’s stock was down from $107.89 a share to $103.42.

In the wake of the incident, Engadget was notified of the error and updated their story. The stock quickly rebounded, but Apple still closed the day down $1.40 a share, which represents $1.2 billion in market capital.

In their follow-up, Engadget claimed that the misleading e-mail did originate from Apple’s servers, but Apple denied this and insisted the headers must have been faked. In either case, the incident was a reminder to stockholders about the fallibility of online news, and a reminder to the journalists who produce it about the value of skepticism.