The Bogus Text on Emulex
If you spread false rumors on the message boards at Yahoo Finance, the
press will opine about the limits of free speech. But make a fool of
reporters by issuing a false press release and you will find
cyberspace is suddenly a very cold and lonely place. News outlets that
were duped Friday by a phony press release offering bad news on Emulex
worked over the weekend to warn the perps that the SEC and FBI were on
their tail.
Emulex, which according to Bloomberg makes "gear that speeds data on
computer networks," saw its share price drop from $113 to $43 Friday
morning as investors reacted to a bogus release. According to CBS
MarketWatch, the release said the Costa Mesa, Calif.-based company
would revise its fourth-quarter results from a 25 cent profit per
share to a loss of 15 cents. Apparently someone masquerading as
Emulex's PR firm slipped the fiction to the PR-agency Internet Wire,
which distributed it.
CBS MarketWatch described the stock's ride as "a wild day of trading,"
and by the time the Nasdaq halted trading on Emulex stock, the
company's market cap was down more than $2 billion. Some quick efforts
by its president and CEO Paul Folino corrected much of the damage, and
the stock closed the day down only $7.31, at $105.75.
In an Associated Press article posted widely, Seth Sutel wrote, "The
incident raised new concerns about the accuracy of information
distributed via the Internet." He reminded readers of a 4 percent dip
in Lucent's stock this spring after a false release claimed the
company would report lower earnings, and the PairGain Technologies
incident last year that boosted that company's stock 30 percent after
a faked Bloomberg report said the company was about to be taken over.
Those other incidents probably gave some little comfort to Internet
Wire chief executive Michael Terpin, who, while noting that these
things have happened to other firms, said his company "deeply regrets
that this incident has occurred." With the SEC and the FBI showing up
over the weekend and asking questions, you can bet he's not kidding.
- David Sims
Investigators Focus on Emulex Hoax
cbs.marketwatch.com
Emulex: News Release Is Fake
usatoday.com
Internet Wire to Turn Over Records in Fake Emulex Release Probe
nytimes.com
(Registration required.)
Internet Wire Duped by Authors of Fake Release - CEO (Reuters)
sjmercury.com
Fake Press Release Sends Tech Stock Plummeting (AP)
nandotimes.com
Hoax Briefly Shaves $2.5 Billion Off Emulex's Market Cap
news.cnet.com |
