Imagine Michael L. Hackworth’s surprise when he clicked on a message posted to the financial section of Yahoo Inc.’s Web site to learn of his own untimely demise.
Hackworth, president and CEO of Cirrus Logic Inc., is alive and kicking at 57, despite last month’s phony news release announcing he’d died “after a long illness.”
It’s well understood by now that for all the wonderful benefits of the World Wide Web, there’s a considerable downside, too: You can’t trust everything you read there.
Of course, you can’t trust some of what you read in print or see on the tube, either. A newspaper columnist’s made-up characters, a magazine’s fabricated computer hacker conventions and a broadcaster’s staging of faulty vehicle performance are enough of a reminder that even the established news media need to be watched.
But maneuvers like the fake news release reporting Hackworth’s death are distributed for one reason: to manipulate stock prices.
Cirrus Logic has been shifting away from making chips that fit on motherboards for personal computers–a business largely being swallowed up by Intel Corp.–and focusing instead on semiconductors for storage devices.
As sales have slowed and earnings have turned to losses, its stock has fallen to around $9 from around $24 in early 1996.
Not surprisingly, short-sellers–investors who bet on a stock’s demise–have been gobbling up Cirrus Logic’s stock.
It’s a fair hypothesis that the crackpot who posted the news release about Hackworth’s death also was shorting Cirrus Logic’s stock.
Hackworth said he initially laughed at the hoax but then became serious. He had a chat with pals Mike Markkula, Floyd Kvamme and Tom Shanks, who are benefactor, chairman and executive director, respectively, of the Markkula Center for Applied Ethics at Santa Clara University.
They’re now considering the formation of an industry organization that would establish standards for policing the Internet. And in true Silicon Valley fashion, they want to keep the government out of it.