Bogus iPhone Cutback Claims Hurt Investors

by , 11:20 AM EDT, August 1st, 2007

After rumors that Apple was scaling back production of the iPhone surfaced on Tuesday, the company's stock took a sharp nose dive and dropped about US$9. Unfortunately for investor pocketbooks, that rumor turned out to be unfounded, according to CNBC.

TheStreet.com cited a report from the analyst firm Miller Tabak & Co., but now the company has stated that it issued no such news. Peter Boockvar, a trader at the firm, commented "We weren't issuing any kind of report. We don't have an Apple analyst."

Despite the inability to confirm that the rumor was false, investors took it as fact, driving Apple's stock down and cutting $8 billion off the company's market cap.

Apple faced a similar situation earlier this year when a rumor surfaced that the company was delaying the iPhone launch for an additional six months. That rumor also turned out to be false, but the company's stock dropped several points before the information was corrected.

The Mac and iPod maker's stock still hasn't recovered from yesterday's shakeup. Apple is currently trading at $129.85, down 1.91 (1.45%).

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