What I don't understand is why so many people bit on this one. When I first saw it yesterday my immediate reaction was "Oh, sure, that's an obvious crock". I didn't believe it for a second. Now I only saw it on page 1 of MacRumors.com. so maybe I missed something. Are analysts really that primed to expect bad news from Apple?

Engadget's wording of the article and not waiting just two hours for verification is what was the worst part.

Engadget didn't NEED to do this - they didn't need to be first to scoop this - they get like the most hits of any blog out there already.

I honestly think they should post a public apology to readers, bloggers, and Apple stock holders.

"What I don't understand is why so many people bit on this one."

Because it's a race. With full-time traders, when news breaks they have to react instantly. And in this situation there's suddenly a lot more risk in staying long. If the report is false, by selling you haven't lost all that much and can get back in. But if it's true and you didn't act you could get crushed.

Because the rumor changed the amount of risk in the position, it's perfectly reasonable to sell, and then perfectly reasonable to buy it right back when the extra risk disappears.

Even if you judge the rumor to have an 80% chance of being false, it may well be that that 20% is enough to make the position "wrong." And so they act.

Quote

geoduck wrote:
What I don't understand is why so many people bit on this one. When I first saw it yesterday my immediate reaction was "Oh, sure, that's an obvious crock". I didn't believe it for a second. Now I only saw it on page 1 of MacRumors.com. so maybe I missed something. Are analysts really that primed to expect bad news from Apple?

I've posted a poll at my site with some mildly entertaining, yet
sadly, possibly realistic options. Feel free to drop in and vote.
Can't vote in this forum, but poll set up at edf, here it is.

Enjoy!


www.everydayfinance.blogspot.com


AAPLE News - How bad do you think the Fallout will be from
TheStreet.com's errant report on the iPhone shortage and subsequent
tumble in Apple shares?


There will be no fallout whatsoever. Cramer's antics and his blogs
partake in rumors, pump/dump and speculation. I would expect nothing
less.
There will be a mild reaction. TheStreet.com doesn't have real
credibility to begin with, so this is a just a blip on the Radar
screen
There will be massive repraisals; Cramer will issue an official
apology, new controls and procedures will be implemented at
TheStreet.com
The SEC will investigate. Politicians will pounce on the opportunity
to attack another "rich guy" catering to "rich people" who trade
stocks and invoke legislation in an attempt to avoid a repeat, messing
with the 1st amendment and their usual antics