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CNN's Small Mistake, Apple Shareholders' Big One


NY Times: Apple Denies ‘Citizen Journalist Report’. Apple’s stock took a brief roller coaster ride this morning after a CNN “citizen journalist” wrote that an “insider” reported that Steve Jobs had been rushed to the hospital with chest pains.

Aha! Those infernal citizen journalists are ruining the world!

Calm down. CNN got used. Maybe it was an innocent mistake. Quite possibly, however, this was the work of someone whose intention was to briefly torpedo the Apple share price. If so, there’s a high probability that this person will be caught and, one hopes, punished.

But it isn’t the first time something like this has happened. False reports have been posted to public-relations wires, including the famous Emulex case many years ago when a fraudster — who was caught and punished — pulled just this kind of stunt.

I don’t know too many details about CNN’s iReport internal systems, but I do know that CNN has been running this kind of risk for some time. The labeling of the site has never been, in my view, sufficiently careful to shout at readers that they should not take for granted that anything they see is necessarily true — or that readers who might make any kind of personal or financial decision based on what they see on the site are idiots.

This is precisely the same warning that should (but doesn’t) come with comment boards on major newspaper websites. But you have to believe that no one with a shred of common sense takes the random ranting below, say, a Washington Post article as anything terribly serious.

The “story” quickly moved to financial and tech blogs and traditional media, which probably compounded the damage by giving the report more play. I was on a plane while all this was happening, so all I’m seeing is updated coverage.

The shareholders who panicked are fools. Not the first time. Maybe when enough people get burned after believing things they should ignore, we’ll all recognize that we have to be skeptical of everything — but not equally skeptical of everything.

Media literacy is scarily far behind the curve in a digital-media-saturated world.

UPDATE: A Wired piece entitled “‘Citizen Journalist’ Could Face Prison for Fake Jobs Story” begins:

The gutsy (and stupid) “citizen journalist” who posted an erroneous story that said CEO Steve Jobs had a heart attack has the hallmarks of a short seller, and it’s likely that he (or she) could face criminal charges and possibly prison time, according to one attorney.

Did an editor even glance at this before putting it online?

If the person who posted the false story about Steve Jobs was a short seller aiming to make money by planting a false rumor, then he was anything but a citizen journalist. He was a crook. Period.

Come on, Wired, you can do better than that.

0 Comments on “CNN's Small Mistake, Apple Shareholders' Big One”

  1. #1 tweetip
    on Oct 3rd, 2008 at 2:11 pm

    1st Tweets ~ Steve Jobs Heart Attack ~ Timeline/Chart…

  2. #2 Jon Garfunkel
    on Oct 3rd, 2008 at 3:31 pm

    re: “The ‘story’ quickly moved to financial and tech blogs and traditional media, which probably compounded the damage by giving the report more play.”

    Which ones?
    CNN’s server logs can best tell us.
    The rumors started affecting the stock at 9:43am, and were quelled by 9:53am. appears to be the one “pro” source that was suckered in. Ironically, it’s a pay site — and, incidentally, the value-add that it pitches when you click on that link is:

    The old Wall Street saying, “buy the rumor, sell the news” is alive and well in the fast paced equity markets. We track them down and report them to our members if they come from a reliable source, having an influence on the market, or make some sense”

    reported this kinda straight-faced, but they did so at 9:55pm. Too late: panic over.

    Remember that most of the public sees stocks on a 15 minute delay. And so it’s highly unlikely this hit the general media/blogosphere at all during the ten-minute panic. A search through Technorati shows that the top rumor-passing website, from 7:56am EDT, was the Spanish-language Apple Weblog RUMOR: Steve Jobs sufre un ataque al corazón.

    So either a lot of this action came from Spanish-speaking Apple watchers, or some internal blog-mining software used by professional traders had pulled this up.

    The SEC will probably get further in this investigation than I.

  3. #3 Dan Gillmor
    on Oct 3rd, 2008 at 3:39 pm

    I can’t wait to find out what actually happened..

  4. #4 Jon Garfunkel
    on Oct 3rd, 2008 at 3:53 pm

    Update to above: the Spanish blogger got this from– guess where– Digg. “joshuasiphone” submitted this as his 2nd Digg story ever, at 5:55am EDT today. A half-hour later, another digg user claimed “I just heard on it on the radio.”

    Digg *still* hasn’t added a way for readers to indicate whether they are “digging” a story because they *believe it* or they *merely find it interesting.* Dan, since you are a super-connected citizen media sage, perhaps you should drop Kevin Rose a line about fixing this.

    And did Henry Blodget pass this rumor as well? AlleyInsider posted a story at 9:18am EDT, but the headline is now different from the permalink. Odd, because their content permalinks are generally derived from the headline.

  5. #5 Andy Oram
    on Oct 4th, 2008 at 6:05 am

    Ever since the popular press began (or maybe things sped up with the invention of the telegraph–I haven’t followed newspaper history) people have complained that journalists are looking for scoops. Great movies, such as His Girl Friday and Absence of Malice, are based on the well-known observation. Now the Internet makes it even worse, and we call it the Drudge Effect.

    Maybe my observation is obvious, but it’s worth putting on record. I know that I can’t hope to make an impact by blogging unless I react within a few minutes to something that hits the news. I just try to do useful commentary instead, or dig around so I can add to the news.

  6. #6 Seth Finkelstein
    on Oct 4th, 2008 at 12:37 pm

    By the way, isn’t one of the talking-point of net evangelists that monitoring this stuff – blogs, twits, What A-listers Say – is a competitive edge? No? Is there any downside accepted to the evangelism?

    Or is this going to be one of those “Heads we win, tails you lose” two-steps? As in:

    Good outcome == Yay citizen-sharecroppers! Go, go, go! We rule!
    Bad outcome == Readers are idiots! It’s THEIR fault! They have to take responsibility for their actions!

  7. #7 Jeremy Rue
    on Oct 4th, 2008 at 5:26 pm

    The folks behind this fiasco was a group known as 4Chan that intentionally tries to manipulate the mainstream media. The NY Times did an incredibly wonderful article on them:

    The larger question is how citizen journalism can thrive in a world where there will always be groups bent on malevolence.

  8. #8 Dan Gillmor
    on Oct 5th, 2008 at 8:17 am

    No, Seth, it’s basic common sense. If you’re going to make a snap decision with consequences to yourself, don’t do it based on a random posting.

    *If* that “citizen journalist” — who may well turn out to have been a scammer — had been right, then I’d give him/her more credibility (a lot more) in the future. But credibility based on a single posting, where real names aren’t necessary? Give me a break.

  9. #9 Seth Finkelstein
    on Oct 5th, 2008 at 9:57 am

    Dan, with all due respect, that’s the second leg of the two-step I was talking about. The statements you make about credibility are not wrong. But that being said, there’s also implicit credibility from stressing the “wins”, without appropriate stresses on the “losses”. To simplify for illustrative purposes:

    Stock Evangelist: John Smith played the stock market and made a killing.
    Sucker: But I lost a fortune playing the stock market
    Stock Evangelist: You need to take responsibility for your own actions!

    Each statement is true. But there’s more to the system than the bare statements.

    When the label “Citizen Journalism” is slapped on anything submitted, that gives it a certain unwarranted credibility. I suppose the two-step comes from going back and saying “citizen journalism” applies only to the good stuff and not to the bad stuff. But that’s only clear in hindsight, not to people who are under pressure to take actions in a system which penalizes fact-checking in favor of speed and popularity (not a new problem, but being made worse).

  10. #10 Jon Garfunkel
    on Oct 5th, 2008 at 12:31 pm

    I’ll add a variation on Seth’s argument. “Citizen journalism” by itself is too broad a topic to say that it succeeded or failed. There were specific failures — perhaps Digg and perhaps Silicon Alley Insider, and possibly CNN iReport.

    The Chronicle asserts that the Insider passed the rumor at 9:25. But Blodget updated the post afterwards without putting a correction.

  11. #11 A challenge for citizen journalism « Reinventing the News
    on Oct 6th, 2008 at 11:22 am

    […] those reacting in useful and interesting ways were Dan Gillmor and Jeff Jarvis. Let’s read their posts and […]

  12. #12 Dan Gillmor
    on Oct 6th, 2008 at 12:48 pm

    I do not slap the expression “citizen journalism” on everything that winds up online, and never have. And I’ve spent much of the past few years explaining to people that this is not a binary — yes, no — question. Seth implies otherwise, and he’s dead wrong.

    You bet I believe in individual responsibility. The first responsibility in “consuming” (a word I loathe) media is to be skeptical, learning what you can trust and what you can’t. If the system penalizes fact-checking in some cases — which I do not concede to be true in general — then it’s our collective task to show people how acting before thinking is dangerous.

    (And, Jon, I do believe that Blodget shares some of the responsibility for the false story’s spread, even if he denies it.)

  13. #13 Seth Finkelstein
    on Oct 6th, 2008 at 5:25 pm

    Well, if it’s not a binary, what is it? It does indeed seem binary to me, in the sense that one either takes the good with the bad, or cherry-picks.
    There doesn’t seem to me to be a middle ground there.

    Note by this I don’t mean the trivial idea that a specific report can’t have more or less credibility depending on real names, etc. But rather, when assessing the workings of “citizen journalism” overall, one has to include the credibility implicitly bestowed on the wrong, the scams, the malicious, OR, there’s a misleading survivorship fallacy of counting only wins and ignoring losses. That seems pretty basic to me.

    Do I really have to point out how appeals to “individual responsibility” are easy ways for the most powerful to blame the weakest for the failings of dysfunctional systems?

  14. #14 Jon Garfunkel
    on Oct 6th, 2008 at 8:44 pm

    Dan– just to clarify, I don’t think I said that Blodget was actively denying it. It was just that he had apparently re-wrote his story to update the realized truth, without acknowledging that many people read (and possibly reacted to) his original version of the story. (a “passive” denial, if you will.)

  15. #15 Seth Finkelstein
    on Oct 6th, 2008 at 10:33 pm

    By the way, that “individual responsibility” touches on something I think is terribly, terribly, wrong with net-evangelism – namely, the way it feeds into an advocacy of risk-shifting away from relatively strong social institutions and onto relatively powerless individuals. The people in favor of this risk-shifting very often (not always, but frequently) have extremely exploitative motives, because it makes the audience then easier prey for marketers and demagogues.

    I’ve been trying to get intellectual-type A-listers like e.g. you or Lessig to think about this, but I admit I’ve been pretty unsuccessful at it (or worse).

  16. #16 LSDI : Bufera sul citizen journalism per una falsa notizia sulla salute di Steve Jobs
    on Oct 6th, 2008 at 11:27 pm

    […] L’ opinione di Dan Gillmor sul caso del finto attacco di cuore di Steve Jobs – prosegue Mantellini – è che CNN sia stata "usata". Che qualcuno abbia abusato di iReport per ovvie ragioni di speculazione borsistica anche se – secondo il noto giornalista californiano – appare piuttosto evidente che nel sito di iReport non è sufficientemente segnalata la natura non giornalistica di quelle pagine e quindi la necessità di non considerarle maggiormente attendibili rispetto ad un qualsiasi altro ambito di rete. […]

  17. #17 Dan Gillmor
    on Oct 7th, 2008 at 12:09 pm

    Seth, I’m not suggesting we should shift all responsibility to the reader. Whoever pulled this scam, if it was more than a (stupid) prank, should be prosecuted. And CNN should be ashamed of its lack of stark labeling on the site — it should be warning people not to assume the verity of anything they see (a warning they should add to the garbage spewed by people such as Nancy Grace on their “real journalism” TV channel).

    But this is not a new issue. If you make a meaningful financial decision based on something you hear at the corner bar, from someone you don’t know, you’re an idiot. And you’re responsible, in significant part, for what you’ve done.

    If we’re going to get exercised about shifting responsibility in this society, let’s go after the big stuff — things like the promises followed by abdication by companies promising pensions, the health-insurance industry’s systematic exclusion of anyone who might get sick, and, the big one, government at various levels making promises that it not only can’t keep but which are going to impoverish our children and their children.

  18. #18 Seth Finkelstein
    on Oct 7th, 2008 at 2:21 pm

    Dan, it’s a strawman to refute (my emphasis) “we should shift *ALL* responsibility to the reader.”. You certainly, avowedly, repeatedly, suggest shifting *MORE* responsibility to the reader. On another strawman, I’ve said above this is not a NEW issue. It’s an old issue being made WORSE. I get these two strawmen over and over. I claim “more” and “worse”, and the strawmen “all” and “new” are knocked-down.

    Regarding the “big stuff”, I have zero power to affect any of it. Look, someone like you or Lessig just might listen to me – maybe. That’s it. That’s my level. That’s the limits of my ability to change anything. It’s hardly a worthwhile recommendation that I should increase my exercise in futility.

  19. #19 Dan Gillmor
    on Oct 8th, 2008 at 1:54 pm

    Of course it’s not a new issue. And while you are making a strawman out of a strawman (in your eyes), I still see nothing wrong with shifting **more** responsibility onto the consumer of media. In fact, that strikes me as a healthy shift.

    The institutions we trust have to earn it. The ones we’ve trusted in the past have not lived up, in many cases, to their part of the bargain. We’re in a transition where the old organizations will have to earn it again, and new ones for the first time — and where consumers will have do a little more intellectual lifting, which they should have been doing all along.

  20. #20 Seth Finkelstein
    on Oct 8th, 2008 at 7:13 pm

    I still see nothing wrong with shifting **more** responsibility onto the consumer of media. In fact, that strikes me as a healthy shift.

    So, we are agreed on the terms of the dispute itself. I believe the above view is DEEPLY, DEEPLY, wrong-headed. What’s wrong is, in a sound-bite, what I said above: “away from relatively strong social institutions and onto relatively powerless individuals”. And when things go wrong, the political demagogues and the sleazy marketers attack the weak – IT’S *YOUR* FAULT, they pontificate, *YOU* have to take *RESPONSIBILITY* for your own actions – in effect excusing the powers they serve. It is, in a word, and I use this directly, EVIL.

    [Sigh, tedious anti-strawman : I didn’t say you are evil, or there’s no such thing as responsibility, blah, blah, blah]

    “The institutions we trust have to earn it. The ones we’ve trusted in the past have not lived up, in many cases, to their part of the bargain.”

    Much of this (anti-strawman: not “all”) is a propaganda line pushed by the political demagogues and sleazy marketers who seek to tear down civic institutions and replace them with propaganda and advertising. I mean, blog evangelism is absolutely marinated in those types of people, taking its cue from right-wing pseudo-populism (anti-strawman: not “every person”).

    To be metaphorical about it all, the situation is a bit like a military junta which wants to overthrow a troubled social-democratic government. There’s bureaucracy, and corruption, and this problem, and that problem, and discontent, yadda yadda yadda – but it also could be much, much worse. And forces which worship The Law Of The Jungle (and anyone who dissents gets stomped-on) tend to be much, much worse.

    The fact that “trust” in new institutions is even more highly correlated with “telling people what they want to hear” than before, should be very frightening to journalistic values.

  21. #21 Seth Finkelstein
    on Oct 8th, 2008 at 7:14 pm

    [Ouch, forgot to close the tag- feel free to fix above/delete this]

  22. #22 Dan Gillmor
    on Oct 8th, 2008 at 9:33 pm

    Seth, this is so far over the top that I’ll just say nothing more. You discredit yourself with such bilge.

  23. #23 Seth Finkelstein
    on Oct 9th, 2008 at 1:36 am

    Why do I discredit myself when many, many, evangelists have said far worse and benefitted?

    What I said was not polite, but it was heartfelt, and that does not make it untrue. I stand by it.

    But I am aware it makes me no friends in A-list places, and for that reason I shouldn’t do it :-(.

  24. #24 Delia
    on Oct 12th, 2008 at 9:56 pm

    sorry I’m late…

    re: Dan: “I still see nothing wrong with shifting **more** responsibility onto the consumer of media. In fact, that strikes me as a healthy shift.” … “consumers will have do a little more intellectual lifting, which they should have been doing all along.”

    You can’t realistically expect average people to spend a lot of time gathering and analyzing information from a large number of sources that may or may not be reliable and do a good job at it (most people don’t have the time and/or the expertise) — it is the job of the media to provide the equivalent of executive summaries that people can use (journalism is failing when it does not fulfill this function)