There you have it. Steve Jobs’ will + Dow Jones + Apple Park =
Google’s buying Apple. I think we finally have algorithmic
transparency.

This morning Dow Jones shot some fake news out over the wires
announcing that Google was acquiring Apple for $9 billion. For
a brief second, the news sent Apple’s stock up about $2 to $158
per share. To the benefit of everyone’s morning, both
stock prices quickly returned to normal.

The story went something like this. Larry Page and Steve
Jobs started discussing an acquisition back in 2010. Jobs
outlined the plans in his will, which dictated the sale to
close tomorrow. Google would get nine Apple shares for each
Google share at a deal value of $9 billion. Insane to a human,
logical to a bot.

Dow Jones issued a statement to 9to5Mac, who first reported the drama. The
company asserted that the calamity was the product of a
technical error and all erroneous headlines would be stripped
from the newswire.

But the human reaction wasn’t fast enough for the algos. We can
only admire the poorly written rules from a distance. It’s
irritating, as it always is, when the curtains get pulled back
for a brief moment and we all realize that our financial
markets are being run by bots with the intelligence of infants.
Keyword search, sentiment analysis, trend identification
(certainly caused by other bots) and whatever other magic was
at play really don’t cut it when long-tail events like this
happen.

I went ahead and pulled some time series data from the moment
the news went live and you can easily see the price getting
pushed up. There’s a volume spike near the end when the system
realizes what is going on and everything instantly returns to
normal.

Update: 1:30pm PST — Dow Jones sent us the following statement

“I take today’s inadvertent and erroneous publication of
testing materials extremely seriously. While immediate
corrective action has been taken, I have also ordered a
review of news and technology processes in this area,” said
William Lewis, CEO of Dow Jones and Publisher of The Wall
Street Journal.


Featured Image: Bryce Durbin

LEAVE A REPLY