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Yesterday, Apple valuation took a $4 billion nosedive when a tip from a good source led Engadget, one of the most read blogs on the planet, to post that Apple was about to announce delays for the release of both its new operating system and the iPhone.
Engadget has since explained, credibly in my opinion, and apologized, and yet, and others are saying the Securities and Exchange Commission should investigate the possible market manipulation in what they call the “Engadget-Apple Affair.”
As Macworld points out, mainstream media has certainly fallen for false tips. Just a couple of weeks ago media no less august than The Washington Post and The Wall St. Journal reported that Microsoft was talking about buying Yahoo – based on a rumor in that well-known fish wrapper, The New York Post.
The bottom line here is that many blogs, Engadget, Instapundit, Huffington Post and even this one have more readers and incoming links that most mainstream media. There are less than 100 newspapers in the US with circulations of more than 250,000. Blogs have enough readers – and authority – to move markets. Get used to it.
I don’t think Engadget did anything wrong. They reported a story on good authority. They checked their sources. They reported that the source was wrong as soon as they found out. That’s what ethical journalists do.
But why did the market move so fast on the stock? That’s the issue I think needs investigation and reflection.
Posted by B.L. Ochman