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Jobs Rumor Debacle Besmirches Citizen Journalism
Posted by
kdawson
on Sun Oct 05, 2008 07:35 PM
from the unverified-is-not-the-same-as-unfiltered dept.
from the unverified-is-not-the-same-as-unfiltered dept.
On Friday someone posted a false rumor that Steve Jobs had suffered a heart attack on CNN's unverified citizen journalism site, iReport. Apple's stock price went vertical, losing 9% before Apple stepped in and denied the rumor; the stock then recovered most of its loss. The SEC is investigating. PCWorld looks at the hit taken by citizen journalism as a result of this incident. "[The] increasingly blurred line between journalism and rumor is a serious concern for Al Tompkins, the broadcast/online group leader at The Poynter Institute — a specialized school for journalists of all media forms. 'How could you possibly allow just anybody to post just anything under your [CNN] label unless you have blazing billboards that say, "None of this has been verified, we've not looked at any of this, we have no idea if this is true"?' he asks."
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Someone is going to get into trouble (Score:5, Interesting)
The stock manipulation possibilities here are pretty big, as is the lawsuit potential.
Re:Someone is going to get into trouble (Score:5, Funny)
CmdrTaco is dead. Sell SourceForge now.
An unsubstantiated rumor is merely an attempt to manipulate a stock, it takes an idiot or ten to actually do it.
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Re:Someone is going to get into trouble (Score:5, Funny)
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Eggs in one basket? (Score:5, Interesting)
This is silly, in any case. If Apple is so dependent on the health of one person, they have bigger problems than the antics of a few journalists.
What are they going to do when Jobs finally does pop his clogs? Sooner or later, that is going to happen, and they need to think about that now rather than later.
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Re:Eggs in one basket? (Score:5, Insightful)
The stock market is constantly looking for reasons to act irrationally
The market moves based on rational people forecasting when others will act irrationally. Given that this second-order phenomenon is always reasonably likely, this happens more or less continuously. By rational people. Yep.
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Re:Someone is going to get into trouble (Score:5, Insightful)
Yeah, but it was unlikely it was someone shorting Apple, isn't it? The SEC has clamped down on selling short right now, right? It's more likely that it was just someone screwing around. As long as they aren't an investor or trader, it's hard to see how they'd actually get in any trouble, any more than the guy who showed up on the BBC supposedly representing DuPont and claiming they were setting up a compensation fund for the people and families of the injured and killed from the Bhopal disaster. It was pretty funny - it put DuPont in the position of having to deny they were going to help people. (DuPont bought Union Carbide a number of years ago). Sure, this stuff can have real consequences, but it's not hard to claim you were just being funny if you have no financial ties.
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Re:Someone is going to get into trouble (Score:5, Insightful)
It would have been easy enough to start the rumor, wait for the stock to dive, then buy some. There was no need to sell short in this case, because the rumor starter could be pretty sure the stock would recover when it was revealed to be false.
BUT, the person who started the rumor only gets in trouble if he or she DID buy Apple stock when it fell. Otherwise it's just CNN being irresponsible by letting random, anonymous strangers post "news" and everyone else being idiots for believing it.
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Responsibility, Risks, Filters (Score:4, Informative)
iReport - News? Or citizen journalism? (Score:5, Interesting)
How could you possibly allow just anybody to post just anything under your [CNN] label unless you have blazing billboards that say
Which part of "CNN's unverified citizen journalism site" was unclear?
Okay, so I have to see for myself...
The site currently is titled "Unedited. Unfiltered. News." [ireport.com] but it really doesn't mention that it is "citizen journalism." It looks like a cross between Digg/Slashdot and CNN. SO I guess someone could be confused. But I bet a big "THIS IS NOT NEWS I JUST MADE IT UP OMG!!" would not have helped Apple's stock that day.
Re:iReport - News? Or citizen journalism? (Score:5, Insightful)
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not a problem with citizen journalists... (Score:4, Insightful)
...but with the financial system. maybe we should be looking instead at how vast sums of money can be moved into and out of a company in seconds? episodes like this have shown the instability of the share market, and the craziness of the finance market. everything is built upon smoke and mirrors - performance counts for little, while perception, lies and marketing rule the day
and why are the traders who sold off their shares paying attention to unverified sources like ireport? well, probably because the trader next to them did; it's all got to a point of 'following the herd' rather than making decisions based on financial judgement.
90% of trades based on speculation? what do you expect?
Re:not a problem with citizen journalists... (Score:5, Insightful)
maybe we should be looking instead at how vast sums of money can be moved into and out of a company in seconds?
This depends on whether it was a pure volume move or a price move - "vertical" drops are generally price moves, where someone will put in a ludicrously low offer price - which is snapped up, and records as a massive down-tick on the traded price graph. Once a couple of trades are made at a low price, the bids are going to stay low and force offers lower. Voila, price drop.
Exchanges have protections to stop ridiculous offer prices from gaming the system, but I guess 10% isn't outside their parameters.
and why are the traders who sold off their shares paying attention to unverified sources like ireport? well, probably because the trader next to them did; it's all got to a point of 'following the herd' rather than making decisions based on financial judgement.
The trader is probably hoping that he's not following the herd - hoping for a time advantage by hanging out at the 'fast-moving' frontiers of 'news'. Watch for a twitter-induced stock drop next.
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Not understanding why this is an issue (Score:5, Interesting)
You believe stuff you read on the internet, you get burned, quel surprise?
It ain't karma, it's just stupidity. It is admittedly disturbing -- and yet unsurprising considering recent world financial events -- that the stupidity in question in this case involves people who work in the stock market.
Re:Not understanding why this is an issue (Score:5, Interesting)
I don't think people care so much about the stock brokers who stupidly sold because they believe what they read on the internet. The problem is everyone else who is losing money for no reason other then owning the same stock a small group of idiotic investors.
It seems highly unreasonable that a company can lose tens of millions (hundreds? billions?) on random investors being retarded. The real victim here is the companies and their employees.
There was a story a month back about google news accidentally running a 2 year old article about an airline filing for bankruptcy. Within a few hours the company had lost several BILLION dollars - poof - evaporated. BECAUSE OF A COMPUTER GLITCH ON A NEWS SITE. The company did not do anything wrong, had made no dramatic business decisions, had not had their entire fleet blow up, yet was royally fucked because investors didn't bother to check their sources.
So the ultimate question is how do you prevent shit like this from happening? I have no idea, I really can't conceive of anyway to regulated the behavior of traders when it comes to false news stories. More depressingly, the ability for these things to occur illustrates a fundamental - unfixable - flaw in the current method of stock exchange. Again, a problem for which I can't think of any workable replacement.
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Well... (Score:5, Interesting)
As one of a group who received a C&D from a game company over a CLEARLY labelled April Fool's Day joke about a decade back, on a hobby site where we REALLY weren't monitoring who our traffic was (thinking "Us and all of our NO readers"). Turns out the site had become a news dissemination portal for various game retailers, and when they viewed the joke page, they panicked before actually reading the WHOLE page and called the game company up to freak out at.
Nonsense. (Score:5, Insightful)
Ok people, I know that those of you who get to write for the real media want this to be important, it isn't, suck it up. Anyway, repeat after me: "Anybody can say anything on the internet, this doesn't make it true."
Re:Nonsense. (Score:5, Insightful)
Seriously, investors knock 10% off the value of Apple's stock because somebody anonymously posted a rumor on the internet and this is "citizen journalism"'s fault? Bullshit.
Right, they're gamblers instead of investors. The reliance on brand-new unverified stories is so they can guess what everyone else will do, and do it first.
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Trust but verify (Score:5, Insightful)
Guys, this is not new.
Some people on /b/ spent an hour early Friday morning discussing how they could make up a rumor that people were likely to believe, just for the lulz. Eventually, and basically by accident, someone decided that a Steve Jobs rumor would work just fine. He posted a fake but almost plausible story on iReport and digg ("I just saw paramedics take Steve Jobs away, he had a heart attack!") and got hundreds or thousands of /b/ users to Digg it.
I saw this conversation happening live. It's pretty cool that tens of thousands of random anonymous people can change world markets, huh?
The story was obviously fake, and any careful reader of Digg would've immediately noticed the 4chan references in the comments. Naturally there were no careful readers; blogs which have never been very good about checking their sources reported the joke as a real rumor, and small parts of the "real media" started to pick up the story.
The beleaguered stock hit its 52-week low on Friday, although it regained some value after Apple issued an official denial. The SEC has demanded (and received) docs from CNN on the /b/tard who submitted the iReport story.
There's nothing new here, guys. Real media have always known that you need to trust your sources, and if the free market and the "new media" blogs can't figure that out, they're dumber than we give them credit for.
Hurting speculators is good. (Score:5, Insightful)
This is actually the way it should be. Using automated trading and real-time news to speculate on the stock market should, on average, lose you money. It gives negative inducement to speculation. Investments need to be chosen based on real data, and concrete value. Not based on what you think others will do.
If this is a legitimate case of attempted manpulation, the SEC can do its job. If not, it's a small loss that should have been factored into any risk calculations when the investors decided to trade like this.
As a more serious post... (Score:5, Insightful)
I firmly believe that this type of event is in the long term best interest of all parties.
Even before the proliferation of untrusted individual reporting becoming trusted (read: blogs) the large news agencies have been blindly trusted by nearly everyone. Everyone is shocked when it's revealed that the reports they read in their papers were outright wrong, or even lies.
Everything we can do to impact every day Joe in a way that gets them thinking critically about news reports will benefit us in the long run. We will, hopefully, become less impacted by propaganda compaigns, as well as less likely to react to news/media reports irrationally and impulsively.
Of course, I admit that this is some kind of massive wishful thinking but, man... wouldn't it be nice to see some random jerk on the street see a newspaper and murmer "I wonder if that's true." instead of "OMG PONIES!?"
Steve Jobs = Apple (Score:5, Interesting)
I think the main takeaway from all this nonsense, aside from stupidity on Wall Street for believing anything and everything, is how frighteningly Apple's fortunes are tightly bound to Steve Jobs specifically.
Bill Gates slowly receded from the limelight at Microsoft, and allowed Ballmer and others to grow into their roles the market's mind. Jobs hasn't really done this yet at Apple. Apple has a few shining lights, but the top of the (Apple) tree is still very clearly The Steve.
The stock market is STUPID (Score:5, Interesting)
We get the evidence of this over and over. Information of any kind; speculation; fear; panic; This is no way to base an economy.
We are off of the gold standard -- something that wouldn't fluctuate so badly as this. Not saying whether or not going off the gold standard was a bad idea, I just see that basing the US economy on this is just bad. Money is created and destroyed out of thin air. This is a voodoo magic market and economy. 700 billion won't fix this problem. What it will do is enable people to keep on doing what they did that allows this sort of thing to happen.
Bullshit (Score:5, Interesting)
Apple's stock price went vertical, losing 9% before Apple stepped in and denied the rumor
Apple stock has been declining for several months now from around $180/share in May. There was nothing unusual in Friday's price movement when compared to the previous two trading days. On Oct 3rd AAPL traded between $98.20 and $106.40 per share, with a daily volume of 12.512M shares traded. On Oct 4th the range was between $95.30 and $102.33, with a volume of 12.739M shares, and Friday it traded between 95.43 and 101.23, and the volume was lighter - with only 11.4M shares traded. This is consistent with the downtrend for the previous 5 months. If you want to buy Apple stock at this point, feel free to become a long term investor.
Although it's understandable that Apple would strive to correct rumors about the health of their founder and CEO as soon as possible, these rumors were NOT the cause of the long term down-trend in Apple stock since May's highs, nor were they the cause of volatility that is completely in line with today's market conditions - especially when you compare the price movement in the stock with Friday's S&P 500 index, they line up almost perfectly with the general sell-off in the whole market that happened immediately after the vote on the financial relief package. People tend to buy the rumor and sell the news. This is nothing special.
I'm sure a handful of bloggers would love to think that they can move the entire stock market, or even a single highly traded stock, so easily, however we traders quickly learn that the market is smarter than all of us, and as the US government is about to find out, it also has more money than any of us, no matter how rich we are.
Re:Hmm... (Score:5, Funny)
"Hell? Even 4chan and Slashdot are pretty clear about who owns the comments and the veracity of the comments."
That's why they are my primary news sources.
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Re:vertical meaning? (Score:5, Insightful)
anyone here ever use the iReport website? i just checked it out expecting it to be like digg or kuro5hin, but the front page "articles" were just vacation photos with descriptions like:
scrolling down i did find some 2-3 paragraph submissions which were editorializing more than reporting on news. and while users are allowed to vote on submissions (it uses a 5 star rating system like youtube), there doesn't seem to be any kind of collaborative filtering system to speak of. even the "highest rated" section only has articles with 10 votes or less.
quite honestly, the demographic of this site seems to be a mix of typical forum trolls mostly posting poorly photoshopped images attempting to be funny, technologically clueless grandmas and grampas who think they're on flickr, and the occasional armchair politician or college pseuodointellectual. there appears to be very little quality control on this site. i mean, the user submissions aren't quite as bad as youtube comments, but it stands in stark contrast to the user-generated content of sites like Wikipedia, E2, Kuro5hin, and even Slashdot.
IMO the problem is not just their poor implementation of collaborative filtering/peer moderation, but also due to companies like CNN/IGN/Sony/etc. not knowing how to seed an online community. quality online communities need to grow in an organic fashion similar to social/cultural movements. sites like E2 or Slashdot start as niche cultures similar to a grassroots movement. they're usually a small tightly knit group of passionate people who are dedicated to the growth and upkeep of the site. these starting members shape the culture of the site and determine the direction of the site's growth. once a viable community has been seeded and a unique subculture established, it will attract new like-spirited members and grow into a larger community.
how CNN has created iReport.com is analogous to astroturfing. rather than a passionate web developer (or group of web developers) coming up with an innovative idea for a new social web app that is fostered and gradually grown into a large online community over the span of a few years, CNN's site was likely conceived of in a board meeting by some marketing consultant to help the company gain street cred or tap into the Web 2.0 craze. in any case, it was created by people who are out of touch with the internet community at large, and who were concerned mainly with increasing CNN's stock value rather than establishing a quality online community.
you can't just create an online community overnight. you can try by spending a ton of money advertising the site. but what you'll end up with is something like iReport. there's no real sense of community, and the signal to noise ratio is incredibly low. it's really no surprise that the quality of the submissions is extremely poor. i don't see how anyone can call the content generated on that site "reporting."
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