No Sources, Please: Is This a Trend?

On March 4, The Sunday Times of London published an article quoting an unnamed source with Amazon.com saying the troubled e-tailer was in talks with bricks-and-mortar monolith Wal-Mart Stores Inc. and an “alliance” was to be announced within six weeks.

The story was picked up by wire services across the United States, and Amazon’s stock shot up 26 percent that day to $12.63 per share with more than 20 million shares traded, twice the usual number for a day.

The next day, the stock reached $14 per share on the Nasdaq exchange before The Wall Street Journal reported in its online edition that The Sunday Times story was basically wrong. “Exploratory” talks had taken place, the Journal said, but they were over, “and no deal between the two companies is likely anytime soon.”

The Journal, the most respected business newspaper in the world, was also quoting an unnamed source. Amazon’s stock dropped immediately to $11.88 per share after the Journal report and was still selling at about that price later in the week.

Freshman college journalism classes teach fledgling reporters not to quote unnamed sources, but apparently things have changed. And business journalism has always been a bit different from the rest of print journalism.

As a general rule, business reporters aren’t as unbiased as their counterparts on the news desk, because business reporters are usually considered to be “experts” on the topics they cover — and perhaps because it’s also more difficult to nail down business news.

In this world of jittery investors, an erroneous newspaper report can cause a heap of trouble. An extra $100 million worth of Amazon stock changed hands on March 4, probably as a direct result of the news about Wal-Mart. This news originated from a newspaper in Great Britain, half a world away from either of the American companies involved in the alleged “alliance.”

Kristal Kuykendall, assistant business editor at The Morning News of Springdale, said she reported the news from The Sunday Times and then The Wall Street Journal even though she is against writing information that originates from unnamed sources, especially another newspaper’s unnamed sources.

The lead paragraph of Kuykendall’s story on March 6 indicated she was skeptical of the initial report: “Wal-mazon.com? Yes, if Britain’s Sunday Times is correct.”

“Because the whole world was reporting it, I couldn’t risk ignoring it and having my readers think I wasn’t paying attention to my beat that day,” she said.

Kuykendall may have been the only reporter in America to wade into this story so cautiously — and rightfully so, it turns out.