Did Engadget author the Applegate ?

May 16, 2007 is a red letter day for at least some of those who got creamed by their hurried exit from Apple Inc. (NASDAQ: AAPL) stock. Based on an Apple’s leaked internal email that turned out to be fake, Engadget, a blog on consumer electronics (a part of Weblog Inc. owned by AOL Time Warner) broke the news of likely delay in release of Apple’s latest iPhone and Mac OS X Leopard. This triggered a massive sell-off, driving Apple stock down from $107.89 to $103.42 in six straight minutes (11:56-12:02) wiping just over $4 billion off of Apple’s market capitalization. A lot of people, mostly day traders lost a lot of money very quickly. By 12:22 Apple stock had mostly recovered and it ended the day down just $1.40/share, or $1.25 billion in market cap – making those who exited the stock in a hurry, looking like an orifice.

One thing is clear. The crappy mail server at Apple Inc needs changing. Steve Jobs may have brought it along from his early days in the garage. I am as well tempted to ask “why is it – first options backdating saga, now this – all happening at Apple ?”

This has been one great year for journalists in the US. Few days back Dubya winked at the Queen and got rebuffed. Now a $ 4 b intra-day washout from as much as a spoof…they couldn’t have asked for more.

On a serious note, this isn't something that never happens. Everyone drops the ball. And when you're trying to break news--that risk is always there. Journalism after all is a business in a hurry and I don’t think Engadget swung the lead – Ryan Block knows well to keep his job. The last time I checked, all the Engadget crew are humans. IMO this is not, and should not, rest at the feet of Engadget, who were simply doing their jobs of feeding those mouth-foaming gadget freaks another juicy piece of meat.

It's a PAPER LOSS unless you bought and sold at exactly the wrong time. I'm sure that did happen to some day traders, but they are nothing but compulsive gamblers in my eyes and I have absolutely no sympathy for them. They have to pay for their fickleness. Ultimately, it's each investor's own decision to decide which news source it trusts and whether or not to sell the stock. Unfortunately we will never know if another media outlet would have scooped the story had Ryan not done it first. Day traders normally keep very shallow stop losses and that’s a great way to lose money on knee jerk reactions. Apple stock has appreciated so much that one could easily see a 2% pullback just on profit taking. Come on, let the SEC focus on the real and insidious market manipulation that goes on.

So who authored Applegate ? My guess is that someone in Apple’s IT was "on their way out" and decided to have a little fun and send this little parting gift. You know what? Something is telling me that eventually, both leopard and the iPhone WILL be delayed. I don't find any fault with engadget for what they did. It was totally understandable. But I just have a sick/funny feeling in my stomach that we actually will get an announcement from Apple saying the iPhone is being delayed.....yet it passed FCC recently, so who knows.

Credibility and trust is the currency of a journalist’s realm, and Engadget’s clear they lost some of that. End of the day this is no SEC filing tracked thro EDGAR, it’s just a blog post. Here’s the Engadget man-up.

This is what I would say to Ryan and his crew – “You guys won't and shouldn't be in trouble. Of course, if you went out and shorted Apple stock before posting it, then you will soon have a roommate named bubba”, but that’s another story !

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