Ah, the Ol' Fake Email to Short a Stock Trick

I was going to write about this earlier, but I had important business to attend to.

For those of you keeping up, Engadget reported today that there would be a delay on shipping the iPhone and Leopard. While it is too early to say anything definitive about the origins of this (my joking title aside), the affects are clear. TechCrunch has a post outlining the basics. Allegedly, what happened is that Engadget received what it perceived to be legitimate information, and proceeded to report that. After this initial report, their stock fell about 3%, or about $3.25 a share. This loss, however, was fairly shortlived as the stock bounced back up to $107.29 after a short time. At the end of the day, AAPL closed 18 cents lower, compared to a loss of $1.84 the day before. What might have happened is that the stock initially started to fall and then a lot of preset selling was triggered, which then just made it fall even further. After people realized what was happening, and that the email claiming the delays was a fake, the stock recovered and didn't take a major hit for the day.
According to Engadget, the original email was verified as coming from the internal Apple email system. Apple was then the one sent out a legit email notifying everyone that the first email was a fake. It will be interesting to see what comes of this, if anything. I'm assuming that the original fake email was either done as a prank (albeit a fairly difficult one that would yield little compared to the risk) or as an attempt to manipulate things. We will have to wait and see. One thing is certain, though, and that is that the power of online media was reaffirmed by this incident, be it for good or bad.