ANYONE who still thinks blogs are irrelevant to what happens on the stock market should read this story.
During the middle of the trading day, top blog Engadget posted an item based on what it thought was an internal company email saying Apple Inc. (NASDAQ:AAPL) was delaying its highly anticipated iPhone and its new operating software.
Seven minutes later, Apple shares dropped on huge volume, plunging from $107.89 to $104.63 in the space of six minutes, according to the Google Finance chart shown below.

AAPL stock fell almost 3% within minutes of the Engadget post.
It turns out that the email, which was made to look like an internal Apple email and actually was distributed to company employees before being sent by someone inside the company to Engadget, was a fake. The fake email and the company’s redaction of it are provided at the end of this post.
Many blogs are now dissecting the incident. Kevin Kelleher of GigaOM says the reaction to the news demonstrates how much investors are depending on iPhone to boost Apple’s fortunes. He also comments on the seemingly sophisticated nature of the scam. “The SEC has its work cut out for it,” he says.
Michael Arrington of TechCrunch, a lawyer by training, wonders who might be the target of law suits over the incident. He doesn’t think Engadget can be faulted, but Apple may be liable if the email originated from its servers, he says.
For me, only one thing about this is surprising. It’s that more people in the investor relations community don’t realize just how closely Wall Street is following blogs.
The emails at the center of the storm follow:
Original Apple email
From: Bullet News
Date: May 16, 2007 9:09 AM CDT
To: [redacted]
Subject: Mac OS X Leopard and iPhone Delayed
Mac OS X Leopard Delayed Until January
iPhone Delayed Until October
REGIONS: Asia-Pacific, Canada, Europe, Japan, Latin America, United States
GROUPS: AppleCare, Retail
Apple
issued a press release today announcing that iPhone which was scheduled
to ship in June, has been moved to October and the release date for Mac
OS X Leopard has been moved to January next year. A beta version of Mac
OS X Leopard will be given to developers at the Worldwide Developers
Conference (WWDC).
Apple email redaction
From: [redacted]
Date: May 16, 2007 10:47 AM CDT
To: [redacted]
Subject: NEWS: Disregard Bullet*News Sent May 16 at Approximately 9 a.m. Central–AP/CA/EU/JP/LA/US
You may have received what appeared to be a Bullet*News from Apple. This communication is fake and did not come from Apple.
Apple is on track to ship iPhone in late June and Mac OS X Leopard in October.