@jwherrman Re your ICOA piece. PRweb will publish anything if you just pay the fee. Source: I see promoters do it all the time
A fake press release suggesting a Wi-Fi hotspot company was acquired by Google sent its stock soaring this morning, and offered a glimpse of the money that can be made when the rumor mill that drives the online economy meets the volatile market in penny stocks.
Early on Monday, a press release purportedly from ICOA Inc, a Wi-Fi hotspot company, was posted on PRNews.com. It made a surprising but nowadays common claim: “Google has announced its acquisition of ICOA Inc. A provider of Wi-Fi to high traffic public locations.”
It was a medium-sized deal by a company that often signs large checks without much fanfare, and it was in an area Google has shown interest in — the company has offered free Wi-Fi via hotspots in the past, and has become an actual ISP in Kansas City. It turns out, though, that none of it was true. Google sources denied the report to AllThingsD, but not before the story was published on most major tech blogs, including Techcrunch.
But the news wasn’t that ICOA has jumped the gun on closed-door negotiations — the deal didn’t exist.
“It is a false release. Don’t know where it originated,” ICOA CFO Erwin Vahlsing Jr. e-mailed BuzzFeed.
ICOA CEO George Strouthopoulos suggested in a separate e-mail that the press release may have been part of a conspiracy to manipulate the company’s stock:
This was a Hoax. We are investigating the source, so far it originated from Aruba
This is NOT TRUE!! Never had any discussions with any potential acquirers!! This is absolutely false!
Someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.
ICOA will report this to the proper authorities.
His theory makes a lot of sense. The SEC has halted trading of ICOA’s stock — a penny stock, by the way, which was trading at just one cent this morning (Update: well below one cent, actually. Closer to 1/100th) — but before it did it went for a ride (ICOA is traded on a speculative market called OTC Pink):
ICOA climbed by hundreds of percent, which would have allowed an in-the-know investor — that is, a scammer — to run away with a huge profit. Judging by the massive bidding volume this morning, in the hundreds of millions of shares, it looks like someone was actively trying to game the stock. As rumors of the acquisition were still swirling, commenters on TheHotPennystocks message boards were skeptical:
-you guys better look at the bid side of ICOA 750 m
-ICOA the volume is ridic
-did I read that right? ICOA at 3 billion volume?!
-lol @ ICOA and fake news.. someone walked away with 1.6 million
If this was indeed stock manipulation, it is absolutely illegal. If was just a bizarre prank, which seems unlikely, it’s still illegal. Either way, it appears to be at least in part the fault of PRWeb.com, the typically credible press release clearing house that posted the original announcement.
PRWeb told BuzzFeed FWD it would respond later today to an inquiry about how the release wound up on its wire.
PRWeb apparently has a reputation for allowing unconfirmed releases through.
Correction: The original article misstated the ICOA’s stock prices, and has been updated.
Please validate your account to contribute content.
Preview Your Response
- Someone Invented A $400 Million Googl... was rebuzzed by Mrs Ge
- Mrs Ge thinks Someone Invented A $400 Million Googl... is Win
Maybe this will be a lesson for people who trust PR News without question. It isn’t like this is totally their fault. But the entire purpose of PR News is “press releases” or “public relations”. That Twitter update is correct: If you pay PR News, they will print your press release. That’s their service. I don’t know what sort of verification they do, or if they were remiss in some way here. Regardless, I’m surprised All Things D didn’t confirm with either Google or that little company first, before printing the story. It does sound like totally typical news, Google acquiring another small company, with the exception that this company was publicly traded. And that should have been a red flag, as most small company acquisitions by Google are not publicly traded with listed (even if penny) stock. This is good coverage by Buzz Feed, and the chart was nice for contrast.
The post-“hoax revealed” price was amended in the article:
“Correction: The original article misstated the ICOA’s stock prices, and has been updated.” It was just after you left your comment. You’re right, though, that a price of $0.01 is a lot less that $1.00! But the author @jwherrman noticed and took care of it. And decently quick, too, as sometimes it takes a day or longer for corrections, even when they are more central to the news story, and on all-business or finance websites, which Buzzfeed is not ;o)
- introvert thinks Someone Invented A $400 Million Googl... is Fail
- michaelc47 Someone Invented A $400 Million Googl...
- Andrew Gauthier thinks Someone Invented A $400 Million Googl... is WTF
It could be a Tender Offer violation, in which case the SEC would go after the profiteer and reverse-engineer charges for stock manipulation. The only laws I can think of that might apply in the case of the prank are libel and fraud. Fraud would be more likely because although the intent may have been playful, mucking about with the securities industry by publishing false information about a company’s acquisition would likely strike a prosecutor as fraudulent. A bit like swerving all over the road because it’s fun. Despite your entertainment intent, legally, it’s still reckless driving and you’d get cited for it.
Here’s another way that it was probably illegal:
Whoever sent that press release to PRWeb was impersonating someone, either from the company (ICOA) or Google. The person who called would have had to pay PR Web to post the press release. I wonder how they did that, without PR Web wondering why the payment was from an unexpected source? This isn’t a common situation, though. I don’t know what PR Web’s rules are for accepting and publishing press releases.
- charlesta Someone Invented A $400m Google Deal ... and thinks it’s LOL
- jonf Someone Invented A $400m Google Deal ...
- wanderinggeek thinks How A Rogue Prankster Invented A $400... is OMG