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Friday, October 3, 2008

Report on STEVE JOBS HEART ATTACK caused Apple Stock Blip

A citizen journalist’s report this morning that Apple CEO Steve Jobs had suffered a severe heart attack and been hospitalized is not true, Apple spokespeople told ZDNet this morning. The initial report cited an unnamed “reliable” source saying that Jobs was suffering chest pains and shortness of breath.

“It is not true,” Apple spokeswoman Katie Cotton said.

The news was first posted just after 9 am ET. Within an hour, Apple was calling it a false report.

The initial report, which sparked a flurry of Twitter conversation, was posted on CNN’s unfiltered citizen journalism site, called iReport. Critics were quick to note this morning that the news site failed its first big test by allowing false rumors to fly under a legitimate news source’s umbrella.

Reports like this could cause CNN to take a hit with its credibility. Even though it says it doesn’t filter citizen journalism, irresponsible postings can have an impact. In this case, Wall Street’s initial response caused shares of Apple to immediately drop almost 10 percent. Within 15 minutes, the stock had largely recovered, back above $100. In explaining its mission with iReport, CNN has said:

With this site, we want to share our passion about the news in a way that invites you — and everyone else — to share your passion about the news. At CNN we live for news. We love talking about it. And we know that there’s a whole lot more to it than what you see on TV or read on your favorite Web site. So we’ve launched an independent world where you, the iReport.com community, tell the stories we’re not used to seeing. And the most compelling, important, and urgent ones may get seen on CNN. So head on over the homepage and jump in. Tell your story and see how it connects to someone on the other side of the world — and build a new kind of news site, one made from communities of shared interests, impassioned discussions and great storytelling.

The bogus report, however, could have given someone a great opportunity to cash in on an Apple short sale. Check out the blip when the report hit.

Apple (AAPL) holders suffered a brief moment of terror this morning when a CNN iReport poster falsely asserted that Steve Jobs had been rushed to the hospital with a severe heart attack. Apple says the report is not true.

Here is the text of the original post:

Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven’t seen anything about this anywhere else yet, and as of right now, I have no further information, so I thought this would be a good place to start. If anyone else has more information, please share it.

The CNN iReport site features reader contributions of “Unedited. Unfiltered. News.” As Silicon Alley Insider writes this morning, “Citizen journalism apparently just failed its first significant test.” The site lists the name of the poster as “johntw,” but a link to his name has no information about his ID.

If the report was intended to knock the stock down, it briefly worked. Apple shares traded as low as $94.65 earlier in the session before rebounding; the stock is now up $3.23, or 3.2%, to $103.33.

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