A rumor purporting that Steve Jobs had suffered a heart attack, published on CNN’s citizen journalism site iReport, briefly sent shares of Apple in a freefall this morning. While Apple quickly moved to quell the rumor, telling Silicon Alley Insider that the news was simply “not true,” in light of the recent concerns over Steve Jobs’ health, the news was enough to spark a rapid sell-off of the company’s stock.
While it will remain to be seen whether or not this was a deliberate attempt to manipulate Apple stock and make money on the part of the citizen journalist who posted the news, it should be noted that Internet rumors concerning the stock market have existed long before we started calling anonymous Web posters “citizen journalists.” During the dotcom boom in the late 90s, stocks routinely made aggressive moves based on comments made in chat rooms and on online message boards, known as “pump and dump” scams.
In any event, today’s case is a bit different because iReport carries the branding of CNN, a respected mainstream media organization. As such, the rumor seemed more credible, and investors obviously made the decision to sell Apple stock based on it. Nonetheless, I think this is mainly a special circumstance – concerns about Jobs’ health have been in the news for months, and any indication that it is moving in one direction or the other has had implications for Apple’s shares.