Rumour rampage
Earlier today we reflected on the power of the media in influencing the behaviour of even the largest companies. Now we bring you evidence of its effect on stock markets too.
The NYT revealed at around 3PM eastern time yesterday that there had recently been a "secret meeting" between Microsoft CEO Steve Ballmer and Adobe CEO Shantanu Narayen. According to the NYT's sources, the main agenda was how to take on Apple in the mobile space and, apparently, a Microsoft acquisition of Adobe was one of the options considered.
Take a look at the Google Finance screen-shot of Adobe's shares below covering yesterday. Note the surge in both the share price and trading volume at 3pm - not a coincidence.
Note also the sudden, incongruous drop in trading volume at around 3:15. This is explained by a brief bulletin from Bloomberg announcing trading was automatically halted for a short time after the price surged 17 percent.
Right now there's no substance to this rumour beyond the NYT report. In fact Kara Swisher at All Things D - who is known primarily as a Microsoft expert - said her sources dismissed the rumour as "nonsense". We're sure the fact that she's employed by arch rival publication WSJ added no additional pleasure to her writing that story. Pre-market trading implies some, but not all, of the hysteria has subsided.
Another set of people who clearly have no ulterior motive are those who leaked the story to the NYT. We're completely confident that none of them bought an Adobe shares before giving over this information.
