To: r gipson who wrote (17350 ) 4/7/1999 9:11:00 PM From: Thomas Kirwin Read Replies (1) | Respond to of 37507
Bogus Internet Posting Leads To Stock Buying Frenzy Wednesday April 7 7:37 PM ET By Bob Tourtellotte LOS ANGELES (Reuters) - An Internet posting of a bogus Bloomberg financial news story sent shares of a small California technology company soaring 31 percent Wednesday only to fall back to earth when the story proved false. The seesawing of Pairgain Technologies Inc. (Nasdaq:PAIR - news)'s stock highlighted the perils that investors face when getting tips from Internet bulletin boards and chat shops, where postings go largely unregulated and rumors spread like wildfire. Shares of Tustin, Calif.-based Pairgain, a maker of high-speed access products used by phone companies, started the day in the Nasdaq stock market at $8.50 and traded as high as $11.13 before falling back and closing at $9.38, an 88 cent gain overall. Nearly 13.7 million shares changed hands, a heavy day of trading for the company's stock. The frenzy started when buyers went to a financial Web page sponsored by Internet portal Yahoo Inc. (Nasdaq:YHOO - news) The page included a link to supposed news on Pairgain. When investors went to the link, they were transferred to a new page, formatted to look like a Bloomberg news site, featuring a story that was supposedly published by Bloomberg. The bogus story said Pairgain was being acquired by Israeli-owned ECI Telecom Ltd (Nasdaq:ECILF - news). for about $1.35 billion in cash and other compensation, and the false news apparently sent investors scurrying to pick up Pairgain shares. Bloomberg published its own story, denying the bogus feature and quoting an ECI spokesman as saying that company was not in talks to buy Pairgain. A Bloomberg spokeswoman declined to comment beyond what was written in Bloomberg's real story.dailynews.yahoo.com