Ah, The Old Press Release Hoax Is Back
from the The-Wire dept
Among the artifacts of the last bubble that we've seen re-emerge of late is the phony exaggerated press release, designed to create an artificial pop in a company's stock price. At least we thought that investors weren't so gullible any more. Turns out, investors are still very susceptible to hype, as one company recently found out when a third party put out a false release saying it had signed a deal with a major company. By the time the company realized someone had put out a false report on them, their stock had already doubled. Perhaps investors can't be blamed; after all, the press release looked legitimate, and had the deal been true, it would've been significant. This event seems reminiscent of when a fake press release was put out, claiming to be a warning from storage maker Emulex, back in August, 2000. That incident briefly knocked $2.5 billion off of the company's market cap. That's another big difference between now and then; the amounts we're talking about with these things are much smaller.