Google is NOT buying Apple: Dow Jones accidentally posts fake news

[WMGroomAK]

So if anyone was following the stock market, especially Apple or Google Stocks today, they may have noticed a brief bit of interest between 9:30 and 9:40 (at least on the Apple stock).  Apparently someone at Dow Jones Newswire may have accidentally hit the publish button on an article that was a test bit for their internal system.  This test article was that Google was going to buy Apple for $9 billion as a part of Steve Jobs will.  The interesting question that comes out from this is whether the brief jump and subsequent drop of Apple stock by (admittedly fraction of a percent) between 9:30 and 10:20 before it normalized is in relation to this and computer stock trading.

 

CNBC Article: https://www.cnbc.com/2017/10/10/dow-jones-posts-fake-headlines-claiming-google-to-buy-apple.html

Quote

Dow Jones Newswires sent several fake headlines shortly after the market opened for trading Tuesday because of a "technical error." The headlines included one that said Google was acquiring Apple for $9 billion.

...

Other headlines clearly said "test," but it was the Apple one that caught traders attention, if for nothing else besides its silliness.

It is difficult to tell if the headlines moved the market as the $9 billion acquisition size was obviously incorrect. However, computers may be more susceptible to trade fake headlines as the volume of algorithmic trading rises.

Ars Tech Article: https://arstechnica.com/tech-policy/2017/10/dow-jones-posts-fake-story-claiming-google-was-buying-apple/

Quote

The Dow Jones newswire rattled markets on Tuesday by publishing a clearly fake story claiming that Google was buying Apple. The story claimed that Apple founder Steve Jobs put the purchase price—an absurdly small $9 billion—in his will.

Dow Jones blamed a "technical error" and quickly retracted the story.

"Please disregard the headlines that ran on Dow Jones Newswires between 9:34 am ET and 9:36 am ET," the news wire said in a statement.

It's not unusual for news organizations to write bogus stories for internal testing purposes. Dow Jones staffers apparently did that at some point in the past, then someone screwed up by pushing the "publish" button.

The story contained a number of clues that it was inaccurate. The reported $9 billion purchase price is barely one percent of Apple's $800 billion market value. The story also refers to "Google Chief Executive Larry Page," a position he hasn't held since Google's parent company Alphabet was created in 2015.

The story said that "the deal was announced when Jobs's will was read in Cupertino, California." But Apple is a widely-held public company—Jobs wouldn't have been able to arrange such a sale in his will.

"Obviously, Google will move into Apple's fancy headquarters," the story read. "Google employees said, 'Yay.'"

This makes for a really fun read, however it does bring up whether computer stock traders can be sophisticated enough to tell a fake news article from a real one as well as what the economic implications of these kind of issues...  Apple's stock appears to have normalized within a half hour yet that may not always be the case.  Any economists in the crowd want to take a stab?  

 

Note:  If mods don't feel this is news-worthy, they can move it. Just thought it was an interesting bit of Tech SNAFU with potential implications...

[arbellason55]

Might want to change the million in your first paragraph to billion to match the article.

[ARikozuM]

@SpaceGhostC2C

 

Why does it seem like Wall Street sucks when it comes to computers? 

[SansVarnic]

Lol ... I didn't believe it myself.

[WMGroomAK]

1 minute ago, arbellason55 said:

Might want to change the million in your first paragraph to billion to match the article.

Done, Thanks for catching that...  Sometimes feels like have dyslexic fingers. 

[arbellason55]

Just now, WMGroomAK said:

Done, Thanks for catching that...  Sometimes feels like have dyslexic fingers. 

Not a problem.

[Taf the Ghost]

16 minutes ago, ARikozuM said:

@SpaceGhostC2C

 

Why does it seem like Wall Street sucks when it comes to computers? 

Because someone probably made money on the move.

[kirashi]

19 minutes ago, ARikozuM said:

@SpaceGhostC2C

 

Why does it seem like Wall Street sucks when it comes to computers? 

Because they probably do. I mean, I'd be no better running something as large as the Stock Market, let alone a press release / news firm, but normally one would want to have a simple thing called "peer review" setup whenever they publish anything public facing. You know, to catch things like this.

[mr moose]

18 minutes ago, huilun02 said:

Looks like someone wanted Apple shares for cheap

or the head of the dow jones newswire just bought google stock.

[SpaceGhostC2C]

1 hour ago, ARikozuM said:

Why does it seem like Wall Street sucks when it comes to computers? 

You mean their trading algorithms suck, their investment decisions about computer related companies suck, or that their handling of the computers they use suck?

[ARikozuM]

Just now, SpaceGhostC2C said:

You mean their trading algorithms suck, their investment decisions about computer related companies suck, or that their handling of the computers they use suck?

Let's go with... all of the above, to be safe. 

[rawrdaysgoby]

LOL who would believe that 9billion only? maybe 900 billion But google can't even afford that lol even before jobs died it was worth more then 9bil

[Rune]

Hell, I'd buy them for 9 billion too.

[OmJo93]

Reminds me of that age old adage, if you can't beat 'em, buy 'em.

[JAKEBAB]

This is pure bs! Should be using fake names for testing purposes but no, they use 2 of the biggest companies guaranteed to get a reaction, this was no accident.

[Bananasplit_00]

1 hour ago, JAKEBAB said:

This is pure bs! Should be using fake names for testing purposes but no, they use 2 of the biggest companies guaranteed to get a reaction, this was no accident.

Its easier to make up something fake about something real though. Either way it doesn't seem to have had an especially large impact on the market 

[SpaceGhostC2C]

On 10/11/2017 at 1:17 AM, ARikozuM said:

Let's go with... all of the above, to be safe. 

Well, I don't know what kind of IT skills people working at WS have  As for investing in IT companies, they are as good or bad as they are for everything else, I guess.

When it comes to trading algorithms, they probably use the best known, since there's so much money at stake. However, algorithm trading suffers from "herding" for a couple of reasons.

The term "herding" was coined to refer to a type of behavioral bias of human traders. It's what it sounds like: people sometimes make trading decisions based on what others are doing, even if they don't know of any reason to do that themselves. It can happen, for example, that a large number of small investors sell an asset just because a big investor did so, even though said investors may have had unique reasons to do so (like needing liquidity), which are irrelevant for the others.

When it comes to automated trading, in principal you there are no behavioral biases. However, there are two forms of "automated herding": first, algorithms look a lot like each other, so if it is time to buy/sell for one of them, it will likely be so for most others as well. Second, algorithm trading focuses on trades for which speed is everything. Therefore, they are design to try and catch the slightest signal and immediately execute tons of orders before anyone else gets to it. This leads to large movements in the market as you aggregate all those individual, automated orders. And though changes in stock prices themselves are unpredictable by definition, these algorithms make heavy used of volatility data, so once they trigger a large movement in prices, they also update their volatility measures with the latest swing, leading to new decisions that may or may not create a new swing or an overshoot in the previous one.

So, yeah, it's like betting billions on a "first!" post

 

(as a side comment, the benefits of moving first are so big that companies invest heavily in being physically closer to the exchange server. They even bid high for top floor/roof facilities in order to use microwave communications over the air, which are the fastest way to get there - if the weather helps: the disruption in microwave connectivity caused by heavy rain has a measurable impact on market outcomes. The more you know... )

[Guest]

On 11/10/2017 at 6:12 AM, OmJo93 said:

Reminds me of that age old adage, if you can't beat 'em, buy 'em.

Android has more marketshare though. 

[JoostinOnline]

Lol why would anyone believe that?  The idea that (1) Apple could be bought for only $7 billion and that (2) Steve Jobs would leave that in his will is utterly ridiculous.  They're worth 3/4 of a trillion dollars.

[OmJo93]

1 hour ago, coolkingler1 said:

Android has more marketshare though. 

True, Android does, but the new Applfied Google doesn't. 

[Guest]

Just now, OmJo93 said:

True, Android does, but the new Applfied Google doesn't. 

But... it was fake news...

[Nicnac]

I bet someone made a nice little side income on this "accident"