Who Faked The Google Inc (GOOG) Acquisition Story?

Yikes. Fake press releases are one thing, but it’s another thing entirely when trusted news sources relay these stories as certifiable fact without doing any bit of source-checking whatsoever. That’s what happened to Google Inc (NASDAQ:GOOG) today, when a press release from Warwick, Rhode Island on the heavily-trafficked PRWeb appeared with the headline: “ICOA Inc. Acquired by Google for $400 Million.” The story broke around noon eastern time, and was picked up by the AP via Yahoo! Finance and TechCrunch, among others.

Google Inc (GOOG)

The press release has since been taken down, but thanks to the truth-seeking folks over CNET – who actually bothered to check the source of the news with ICOA’s top brass – we still have the transcript of the release. For a screenshot of the PR, here it is in its full glory, per a quick-thinking reporter at ZDNet:

Credit: Larry Dignan/ZDNet, original screenshot from “It’s fake: Google didn’t buy hotspot provider for $400 million

No matter what our take on Google Inc (NASDAQ:GOOG) as an investment is, we won’t beat a dead horse about this story, but it’s worth mentioning that there is at least one notable grammatical error, possibly more – something that a major acquisition story wouldn’t let slip through if it were true. While it’s tempting to say that all is fair and well in the markets with the truth finally coming out, it is possible that this was intentional fraud, designed to manipulate the press for profit.

In a 60 minute period of trading in the middle of the day, shares of ICOA INC (PINK:ICOA) briefly touched $0.0004 a share – nearly four times their value one hour earlier – before falling back down to $0.0001, where they had previously been trading near. When looking at share volume, a similar phenomenon occurred, with the number of shares changing hands rising above 500 million over a five minute span at one point. Interestingly, volume began to pick up on the stock before the PR was issued, and some selling activity began to occur before the masses caught wind of the hoax – two clear signs that someone with foreknowledge was responsible for the inaccurate information, and was looking to profit from it.

As CNNMoney discussed quite nicely, ICOA CEO George Strouthopoulos said in an e-mail that “[s]omeone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.” The outlet also mentions that a simple back-of-the-envelope arithmetic would have discovered “the fake deal’s fishy side,” as $400 million from Google Inc (NASDAQ:GOOG) is far too expensive for a penny stock with a market cap under $1 million. Moreover, Strouthopoulos told Reuters that “[w]e are investigating the source, so far it originated from Aruba.”

While it’s very likely that the SEC will investigate this PR scam and hopefully, find those responsible, it should serve as a lesson for armchair analysts with a quick trigger finger to follow through with their sources before publishing erroneous content. After all, one would expect that an acquisition worth hundreds of millions of dollars would also come with an official announcement from Google Inc (NASDAQ:GOOG) and ICOA.  Like it or not, our fortunes are tied to the chatter that surrounds the investing world on a day-to-day basis, which is why we’ve warned about potentially bogus stories in the past. Below is some of our past coverage. It’d probably be best to sift through it in order to be prepared going forward:

Does Apple Really Have an eBay Store?

Black Friday Recap: Apple ‘Dominates’ Microsoft, So Some Say

Two Bearish Signals That Apple Investors Should Just Ignore

Be Careful of This Latest Apple Rumor

Let us know your thoughts on these issues in the comments section below.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!