iOverkill Drowns Out Bigger Story - TheStreet

iOverkill Drowns Out Bigger Story

Distracted by the iPhone, the media ignored a technological glitch that led to broken trades.
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Pity the fools of the business media, who get so distracted by flashy little items that they miss bigger and more substantive events.

This applies to late Tuesday afternoon, where big news of some sort will be announced and all but ignored by a business media that will be suffering from a bad case of premature fireworks. Beware and be aware. Especially because with news space light on Wednesday, July 4, a lot of bad news is purposefully timed for a July 3 release.

But the really amazing oversight occurred late last week. As the release of

Apple's

(AAPL) - Get Report

iPhone was being covered as an equivalent to the Allies landing on Normandy or Paris Hilton's release, something really big went all but unnoticed.

First, the Business Press Maven needs to make two disclosures. One: I try, as you know, to stay clear of highlighting work by

TheStreet.com

-- if only to avoid charges of favoritism. And Aaron Task, the bigwig from

TheStreet.com

who

broke this news, and The Business Press Maven will soon be taking a book proposal to market. I want it to sell for a good amount, enough to keep Mrs. Business Press Maven in mink.

All that bias aside, though, you have to look at this -- for the issue itself and to get a sense of how distractible the boys and girls of the business media can became, especially around a jazzy product and lines of shoppers.

After all, that's what we had for the latter half of last week: incessant coverage of the iPhone. We had rank speculation about what the phone would be like, the release of the phone to a few targeted journalists with the requisite, by-and-large positive reviews, the Christmas season-esque coverage of lines of camped-out shoppers, with the implication that such lines equal lasting demand and profits, and, finally and just as predictably, some backlash coverage.

Meanwhile ... on Thursday, amid all the clatter, shares of three companies including

AT&T

(T) - Get Report

and well over 50 million shares in total were halted for most of the morning. The other companies were

Wyeth

(WYE)

and

Jefferies

(JEF) - Get Report

-- no obscure slouches on the pink sheets, mind you.

Didn't hear about it?

Well, neither did most investors ... who were too busy reading "iWant" coverage with human-interest angles about those willing to leave the children they did not already auction off to raise funds with total strangers so they could spend a night listening to their iPods on a lawn chair, waiting for their iPhone.

While all this was going down, so too was confidence in the entire concept of electronic trading. Seems worth a mention, no? You can read the gory details in

Aaron Task's work, but essentially a technology malfunction led to a series of erroneous trades on a scale not seen since Isiah Thomas came to New York: about 40 million shares of Wyeth, 25 million of A&T and 4 million of Jefferies. The

NYSE

then went and broke the trades, in possibly the most expensive do-over in history.

I'll let others sort out the details of who had the fat finger, why and how certain traders are going to be made whole. The point is that this happened Thursday morning and was apparently cleared up by about noon, and, thanks to Task, investors were reading about it on

TheStreet.com

with updates soon afterward.

But outside of that? Dude, it was radio silence.

With wall-to-wall coverage of the iPod release, this enormous and intriguing news ... apparently wasn't.

I'd give you links, but there aren't any. On Friday, there was

no

mention of this in either

The Wall Street Journal

or

The New York Times

.

Bloomberg

gets a point for at least deigning to cover the issue of Thursday but, uh,

it did not mention the breaking of the trades.

If an article is published but does not mention broken trades, is it in fact an article?

For a savvy investor, of course, the issue is bigger than any trade (broken or otherwise). The lesson is essential: When something flashy is the subject of a lot of focus (whether the iPhone or coming fireworks), there is always the potential that something more substantive will be ignored.

Please send me your favorite ignored story on Tuesday. If I'm not already grilling hot dogs, I'll take a look.

One more stunningly insightful thought on the iPhone coverage. I get a lot of reader email about how the business media are too negative or too positive. It's all wrong, of course. The business media are just too too. What do I mean by that? Well, it can all be seen in the iPhone coverage.

They are just overly positive and overly negative, often riding the same story two ways. One story, twice the headlines.

Last week, even from tiny papers, we saw resoundingly positive and excited coverage. That "iWant" headline? It came from

a small local paper in the geometric center of America: Olathe, Kansas. It included a little tale about a 13-year-old boy on line for all hours after having mowed lawns for six months to save money for his iPhone. Considering that grass only grows in the warm weather, was this even possible?

Well, let's not quibble. The point was -- there were people on line, which means that in American journalism, there was a story to tell.

As reliably as that happens, so too does the second wave of coverage -- the shin-kickers. And in the past couple of days, we've seen a lot of that, for example,

here and

here.

Where does the truth always lay? Only in the fact that whenever there is so much noise, something important is lost to silence.

As originally published, this column contained an error. Please see

Corrections and Clarifications.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;

click here

to send him an email.