Jason,
Didn't mean to get you so defensive. You're right; my analogy is flawed. But people who owned EMLX at 113 on Thursday, sold it at 50 on Friday based on a bogus press release that was apparently broadcast as fact over a couple reputable news services. To me, that's similar to having money stolen.
I think the biggest damage done on Friday was to the news services. I know when I started hearing that the press release was bogus, I had to ask myself "Which set of press releases is a hoax? The ones reporting the restatement of earnings, or the ones reporting that it was all a hoax?"
Something is wrong, when investors have to start inspecting press releases from legitimate news services for grammar and consistency of phone number formats, to determine whether the press releases are "real".
And how does one distinguish between a hoax and a rumour?
A rumor is reported as a "rumor" on newswires and is discussed as fact only on chat sites. A "hoax" is reported as fact on newswires. If an analyst says "EMLX is the most likely takeover target in the Fibre Channel sector." That's a rumor. If a PR says "EMLX is being bought out by CSCO for $8 billion in stock" that is either a fact or a hoax; it is not a rumor.
When I see a report on a respected newswire that says "ABC company will be restating their earnings," I'd like to think I can trust it. I really don't want to send each news release through a spellcheck and grammarcheck before I make a trade decision.
As I said before. I would not return the money. I probably wouldn't feel much guilt about having bought EMLX at 50 on Friday. But it still sucks for the people who got burned. It's just not how the game is supposed to be played. Rules were changed mid-course. According to you, had the PR been grammatically correct and more consistent with previous EMLX pr's, you wouldn't have "figured it out" either. So next time, the hoaxters do a better job and you don't figure it out.
Or worse yet, Monday, CIEN releases a grammatically incorrect PR and you think it's another hoax so you buy on a dip. Then the stock tanks.
I love the volatility that these incidents cause, but I think they're the dirty side of trading. Hell, I'm almost positive I'm going to trade EMLX on Monday, simply because it'll be more volatile. But it's a dirty part of the business. You've at least got to admit that. |
