Early this morning, someone filed a CNN iReport (citizen generated content) saying that Apple (ticker: AAPL) CEO Steve Jobs had a massive heart attack.

Apple’s stock immediately dropped 5%.

AAPL: 104.52 +4.42 (4.42%) - Apple Inc.

Apple PR responded to mainstream media inquiries denying the rumor, that Jobs was perfectly fine. (hat tip to the Unofficial Apple Weblog for breaking it on Twitter first)

If you were going to short a stock, spreading a false rumor about the CEO’s health would be a great way to cause a panic, long enough to make some serious money. The brilliance of this tactic is that the rumor was done using CNN’s brand. Early “viral” messages said the report came from CNN, not CNN iReport. CNN, in other words, had their brand and credibility hijacked.

What would you do if you were Apple? What should you do?

Apple: get on Twitter. Get in the blogosphere and the new media world. You need to have a point person in the fast moving channels of citizen news to immediately knock down crap like this.

Then have your legal department file a complaint with the SEC and ask for a formal investigation.

Apple shareholders: if you lost money on Apple due to the rumor, is CNN responsible? Is CNN liable? Are they a media outlet or a content distributor. If they fall under common carrier, then who is liable besides the original rumor spreader – and are the shorts, if there were any, profiting with no liability?

Inquiring minds want to know.

Bottom line: if your company is not participating in new media, especially in news channels, you’re going to get run over. Get going.

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Shorting a stock, 2.0 style 1 Shorting a stock, 2.0 style 2 Shorting a stock, 2.0 style 3

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