Jobs Rumor Debacle Besmirches Citizen Journalism 286
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."
Someone is going to get into trouble (Score:5, Interesting)
The stock manipulation possibilities here are pretty big, as is the lawsuit potential.
Hmm... (Score:3, Interesting)
Hell? Even 4chan and Slashdot are pretty clear about who owns the comments and the veracity of the comments.
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:Someone is going to get into trouble (Score:3, Interesting)
Lawsuit or criminal? When I think of lawsuits I think of civil proceedings. IANAL or anything but wouldn't intentionally tanking the stock of a company via unsubstantiated rumor be criminal? (I don't really know so I'm asking 'cause someone here should surely know.)
Fear and greed (Score:3, Interesting)
If I recall even the article writer wasn't sure it was true and said as much. It's typical of the stock market to rise and fall on the possibility of something happening. I'm surprised Apple's stock isn't in the toilet already -- they must think Steve Jobs is immortal...
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.
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.
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.
Re:Responsibility, Risks, Filters (Score:3, Interesting)
Re:Nonsense. (Score:3, Interesting)
Right, they're gamblers instead of investors.
Which is why a tax on trades is in order. Make the cost to play to gamble on stock high enough that people don't do it, but the cost to invest longer term still pays. People don't professionally gamble because most of the games are rigged in favor of the house -- over the long term you can't win against the house by gambling. Stock gambling should be the same way.
I believe the democrats suggested this for part of the bailout bill. I think it was shot down though as part of a 'compromise'.
Re:Well... (Score:4, Interesting)
And here a link [archive.org] to said April Fool's joke.
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.
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.
Re:Not understanding why this is an issue (Score:1, Interesting)
Explain to me, please, how a company loses millions of dollars from short-term stock price fluctuations. The only relationship between a stock and that stock's company's finances is at the time the stock is first issued: people give the company money, the company gives the people stock. At that point, the stockmarket will trade the stock, and money passes from one investor to another. Not from the company to an investor; not from an investor to a company.
As long as the company can show that its books are solid, nothing that happens on the stock market should affect its finances. (Unless it's seeking to raise funds through a stock issue, of course.)
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.
Re:Fear and greed (Score:3, Interesting)
...or they lack the imagination or foresight to think more than 3 minutes into the future and can't predict that he will have an ultimate demise.
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:Trust but verify (Score:3, Interesting)
Re:iReport - News? Or citizen journalism? (Score:3, Interesting)
Oh really? Other than the book reviews and journal postings you mentioned - which qualifies Slashdot as a successful blog - I haven't seen much in the way of original articles since Katz left. Even what he did was more along the lines of an opinion piece. Not what I would call "news."
I see, we're getting caught up in words.
If Google gathers together news articles produced by other sources, and presents them as a collection of news from top agencies, they are an aggregator. I don't really consider them a "news site," because they don't (as far as I know) employ reporters who go out and gather news. They don't produce original news content. If they put a New York Times story on their front page, it is my impression of the Times' credibility that will determine whether or not I take what is reported as factual.
Well, I think CNN and the Washington Post other sites whose business is to sell eyeballs to advertisers are probably pretty careful about protecting themselves from libel suits, and spend a non-trivial sum of money checking the things they report as facts. They may not always get it right, and we may not always agree that they represent those facts objectively, but their reputation heavily influences the amount they are able to charge people to advertise in the dead-tree versions of their publications.
So yes, I think some sites put a lot more effort in to verifying facts than your average "citizen journalism" blog.
Because the geocities website and random forum put the same resources in to checking the accuracy of what they report as CNN and Reuters? Nice try. Let's compromise with "maintain a healthy skepticism."
True, but I'll put AP, Reuters and even CNN's record up against some random blog any day, because they have earned at least some credibility. So have some blogs, and more will. You make a name for yourself by having a reputation for always being right, because you always check your facts. Get caught running with something you weren't sure of just to get attention and your credibility will be shot. That's what the big news sites have that the random blog doesn't - a reputation worth protecting.
Re:This was NOT CITIZEN JOURNALISM (Score:3, Interesting)
That doesn't mean he cannot have interesting or insightful comments. I don't understand why some people get so obsessed about him.
If I read a comment, I value it by itself, not by person who wrote it. And Slashdot moderation system is resistant to cloning, as far as I know.
This reminds me - so I wouldn't be offtopic - we very much need more statistical techniques for detection of duplicate online personas, and more robust systems to manage trust (like something that could trace the original source of information for us). This would certainly helped to alleviate problems mentioned in the article.
But how do you tell them apart? (Score:3, Interesting)
Well, the problem with citizen journalism is that, pretty much by definition, you don't know who's who. It could be
- a concerned citizen who's done his research, but equally it could be
- a traditional journalist trying to get more street cred to his newspaper views (see the story about that guy editing Wikipedia about naked shorting,)
- an idiot talking out the arse,
- a zealot on some holy crusade, and who already found his "Truth" and all that remains is to spread the word to the ignorant masses. And for whom no lies, fallacies, FUD, disinformation or hyperboles are too low to be used in that holy goal. (And not just lonely nerds. Whole think-tanks exist who make propaganda their only mission.)
- a paranoid schizophrenic who takes his own imagination for reality (and I mean paranoid schizophrenia as in, the medical meaning: the kind that comes with realistic delusions),
- a shill (PR disguised as news, astroturfing and pseudo-word-of-mouth buzz-building are still popular devices),
- someone trying to manipulate another company's stock (own before selling some, or the stock of someone he wants to buy stock in),
- a joker who isn't funny enough to be clear that he's joking (just look on Snopes for some fine examples of joke news which then got taken seriously by too many people. Or I've seen at least one serious article, which linked to a The Onion story as source,)
Etc, etc, etc.
So going, essentially, "yeah, well, but that was one of the _other_ guys, trust us not him" is handwaving, as long as you can't tell who's who. For the outside guy, they all look the same. And they all claim they're the genuine article, and some _others_ are the ones you shouldn't trust.
Even reputation, people linking to it, posts confirming it, etc, are meaningless. For a start, we're in the golden age of sockpuppets. Also, things which are blatantly false for anyone with even a modicum of education, routinely get modded up "Informative" even on Slashdot, and conversely textbook quotes routinely get modded down. Or look at how "pundits" like Dvorak make a living and are read by a ton of people as great IT information, even though he's the same guy who had a whole article along the lines of, "my idle process in windows is using up 99% of the CPU cycles! That's why my windows is sluggish!"
Journalism reputation (online or old press, equally) is more of a question of saying the things a given crowd wants to hear, than anything even vaguely resembling truth value or quality. Or a matter of sounding like some knowledgeable guy giving a free lecture, even if you don't actually know jack shit about the topic. Again, see half those IT "pundits", but also a good number of posts right here on Slashdot.
Even credentials are routinely faked (see, 14 year old kids posing as some Ph.D.) or bought. Either from some diploma mill, or just finding someone with a Ph.D. title to sign your PR piece. Corporate PR uses the latter kind quite extensively. There'll always be someone who doesn't have much of a good name to lose, and will take your 30 silvers to give science the kiss of death. Even with tongue, if you pay extra.
So who _do_ you trust in a medium where for each 1 genuine citizen journalist, there are 99 fakes?
Re:Nonsense. (Score:2, Interesting)
Actually, it used to be that commissions on trades were so high that nobody other than people with seats on the exchange could really day-trade. Those people could (and did) play some nasty shenanigans with stocks, but it was easier to control them because there were only a few of them.
Now, of course, with automation, etc trade commissions are extremely small (and in some cases non-existent). Any moron with a little bit of money can turn into a professional gambler. The problem is that it can destabilize the market. Things can rocket out of control.
There is the famous story of Joe Kennedy getting out of the market before the big '29 crash because a shoe shine boy gave him stock advice. The market is overinflated when poor people gamble on the market. When the market turns, they will take their money out -- leading to a crash.
My feeling is that most day trading should be illegal. If you make a trade, then perhaps you should be stopped from further trades on that security for something like a few days. If you have a margin, perhaps you should be required to carry a certain amount of cash (or cash equivalent) to cover margin calls for a certain time.
I definitely haven't thought this through, so maybe it's impossible. But I think the current situation is really leading to massive problems in the future (in fact, unless things change, I'm wondering if the stock market *will* see any substantial gains in the next 20 years or so -- I certainly don't have any money in it right now).