Friday, October 03, 2008, 03:00 pm PT (06:00 pm ET)
SEC investigating false report on Steve Jobs heart attackThe Securities and Exchange Commission said Friday it's investigating whether a false report that Apple chief executive Steve Jobs suffered a heart attack was published in a effort to manipulate the company's stock price.
The report, which appeared briefly on CNN's citizen journalist website early Friday morning, claimed that Apple co-founder had been rushed to a local emergency room following the "major heart attack."
Apple representative Steve Dowling flatly denied the report, saying it was simply "not true." The incident follows a regular series of rumors and speculation prying into Jobs' health ever since he underwent treatment for pancreatic cancer in 2004, and his more recent struggle with related nutrition issues that have since contributed to visible weight loss.
CNN spokeswoman Jennifer Martin told Bloomberg the content published by her company is "entirely user-generated," and that once "the community brought it to our attention, the fraudulent content was removed from the site and the user's account was disabled."
CNN's iReport.com, which served as the outlet for the false report, describes itself as a source of "Unedited. Unfiltered. News." The site "makes no guarantee about the content or coverage'' of the headlines it publishes, which are mingled together with stores that have been picked up to appear on CNN.
A month ago, Jobs made an off-hand comment to CNBC's Jim Goldman, in which he appear to blame the incessant reports focusing on his health on hedge funds who are seeking to profit in the short term on market panic created by false reports and unsubstantiated, speculative reporting.
Apple investors have expressed frustration that the company has not been more forthcoming about Jobs' health. Ryan Jacob of the Jacob Internet Fund, an Apple shareholder since 2003, told Bloomberg, "It's a tough position to be in. They [Apple] don't continually want to field questions and make news when there is no news. We as investors have to hope that if there is something material to say, they will comment quickly."
"Leaving it to rumor and speculation is reckless,'' said Jeffrey Sonnenfeld, another investor who has owned Apple shares since Jobs returned to the company in 1997. "If he is healthy, they should say so. If he's not, we should know that too.''
Despite poor economic conditions, Apple's products are still setting records. Bloomberg cited analysts noting that Apple could reach a record $30 billion in sales this year. With no end in sight to Apple's growth, the most effective way to knock the company's stock price down is through fear and false reports.
Apple has been in a steep slide ever since the middle of August, despite the company's continued performance, due to a series of general concerns about the economy voiced by analysts. Just over a week ago, Katie Huberty of Morgan Stanley lowered her Apple price target from $192 to $179 citing unspecified general weakness in the "global macro-economic environment."
Over the last year, Apple's stock price has wildly fluctuated between a high of $202 and today's low of $94, shedding over $86 billion of its market capitalization over a roller coaster ride largely unrelated to the company's fundamentals and actual performance.
Word of the SEC's investigation into Friday's false iReport was first reported by the Bloomberg news service.
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