Ah, The Old Press Release Hoax Is Back

from the The-Wire dept

Thu, Dec 21st 2006 9:22am — Joseph Weisenthal

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.

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5 Comments

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Bumbling old fool, 21 Dec 2006 @ 9:53am

Think big, start small
You've got to test the waters first to make sure the market is ready for mass-harvesting.
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PhysicsGuy, 21 Dec 2006 @ 11:07am

At least, we thought, that investors weren't so gullible any more. Turns out, investors are still very susceptible to hype

there have been plenty of psychological studies that show 2/3 of people are essentially sheep. don't let it come as a surprise to you that a majority of investors were, are and will continue to be susceptible to hype.
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- RustyBst, 21 Dec 2006 @ 11:34am
  
  Re: Sheep?
  "there have been plenty of psychological studies that show 2/3 of people are essentially sheep"
  
  Sheep huh, is that the scientific terminalogy used. You sure it wasn't "Tards"?
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BillDivX, 21 Dec 2006 @ 11:50am

actually
Isn't there a particular specialty in that? I mean, I think there is a subset of psychology that deals with group thought. It does appear to be very true that people, even normally intelligent ones, take on a sheep-like behavior when placed in a large group with even a remotely common goal. I wonder how thoroughly that effect has been studied, and what, if any, percentage of the population seems immune to it.
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JohnnyZTS, 21 Dec 2006 @ 2:04pm

Sheep
Baaaaa.
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