To the iTune of $4 billion.
As a public relations professional and also a blogger, I am more and more aware of how quickly a popular website can wreak havoc on your organization or brand, even with unsubstantiated rumors. Moreover, how quickly bad news can be broadcast out over the vast network of websites that make up the blogosphere. I have coined this phenomenon a “firememe,”and I think we had another example yesterday.
Yesterday, what turned out to be a false report was posted on the popular blog Engaget that announced the Apple iPhone and the Leopard operating system would be delayed. Apple stock tanked to the tune of $4 billion.
The report came from an internal e-mail sent to Apple employees.
Timeline of a Firememe
May 16, 2007
9:09 a.m. –
Fake e-mail sent to Apple employees, then forwarded to Engaget by a “trustworthy source”
10:47 a.m. –
Another e-mail from Apple to its employees debunks the first e-mail, calls it a “fake.”
11:49 a.m. –
Engaget publishes an item based on the first e-mail
11:56 am. to 12:02 p.m. –
Massive sell off of Apple stock from $107.89 to $103.42 in six minutes with a total loss of about $4 billion (about 2.2% of market cap)
12:00 p.m.-ish –
Someone from Apple PR contacts Engaget after he had already seen the second e-mail (Engadget's Ryan Block confirms this, see below)
12:15 p.m. (approx) –
Engaget updates its site with corrected information
12:22 p.m. –
Apple mostly recovers by the end of the day, down just $1.40/share, or $1.25 billion in market cap (down .17%)
May 17, 2007
7:21 p.m. –
Ryan Block gives an inside look at how the reporting for the erroneous post was conducted
Total time elapsed between the Engaget post and the loss of $4 billion:
Approx. 30 minutes
Sometimes it takes me that long to ramp up on a project.
There were no “official” announcements from the company in its press room, so I assume that the communication was all done behind-the-scenes, something Apple most certainly would have the capacity and contacts to accomplish. Clearly, the company acted quickly to correct the information with Engaget, which in the end saved its stock
What I always wonder is, what if it were one of my clients/organizations? Would we be ready? You should ask yourself the same question.
And also, don’t imagine that a smaller blog couldn’t have the same effect, it just might take slightly more time. Remember that this firememe was started rolling by an Apple employee, with no publishing platform of his own (at least where the person would dare put this). The employee's only asset was a relationship with an Engadget writer.
That was all it took – one well-placed word-of-mouth encounter.
The mainstream media picked up the story the day after the event.
(Hat tip to: Erik Eggerson and Rob LaGesse)
Update: Ryan Block posts a follow-up story to his initial post outlining how his reporting progressed. One interesting fact is that he called Apple's PR department and even a cell
…before publishing anything — we immediately contacted Apple PR, trying to reach our contacts on their PR team that handles iPod / iPhone matters. It was before business hours on the West coast, though, so we even called an Apple PR manager via their private cellphone in search of a statement. When no one was immediately available, we left voicemail and email.”
The Apple PR contact didn't call back until AFTER the second e-mail was sent. I am not sure if they called back before or after Ryan updated the site.
Photo by Yong Hian Lim