Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Fake Google Press Release Didn’t Net Anyone Much Money

For the time being, we’re probably not going to know much more about the fake press release issued today on behalf of Google. What we do know is that the alleged acquisition of Rhode Island-based Wi-Fi company ICOA never happened.

We have one enticing clue shared by its CEO — someone in Aruba may have been involved. That someone sent the press release to the Vocus-owned distribution site PRWeb. But we can pretty easily guess at their motivation: To cause a tiny upward movement of ICOA shares in order to create a selling opportunity.

It certainly seems like a lot of trouble to go to for only a tiny payoff. Whoever it was who chose to sell today, they didn’t make much. ICOA shares trade at so low a price that they’re pretty close to zero. According to OTCbb.com, a site that tracks the movements of so-called “over the counter” stocks, the price of the shares has hovered at $0.0001, or if my recollection of fifth-grade math is correct, the equivalent of one ten-thousandth of a dollar — or, if you prefer, one-hundredth of a penny.

As word of the “acquisition” spread, thanks in no small part to numerous Web sites and news services, including the vaunted Associated Press — which later issued a “kill story” order — the shares traded as high as $0.0005 per share.

At about that time, trading volume on the shares spiked. While the company itself is a bit of a flyspeck, with a market capitalization of less than $850,000 as of today’s opening price, it has an awful lot of shares outstanding. Earlier this year, in a press release notably sent via PRNewswire, it announced a capital reorganization plan under which it reduced the number of shares outstanding from 10 billion to 7.5 billion.

As you can see from the image below, trading activity spiked when the price was highest. And if I’m reading the chart below correctly, when the price was at its highest someone sold about 300 million shares. If you add up the on-paper value of the shares sold during the three most active moments of the trading day, you’d arrive at a figure somewhere in the neighborhood of $225,000, give or take. Not exactly money worth risking jail time over, but then we don’t yet know the whole story.

ICOA CEO George Strouthopoulos has been quoted in other published reports saying that the matter has been reported to the U.S. Securities and Exchange Commission.

PRWeb, a division of Vocus, a Beltsville, Md.-based firm that makes software for managing PR and marketing campaigns, took the fake release down sometime before 2 pm ET, and issued a statement acknowledging the hoax.

PRWeb Statement on Fraudulent ICOA Press Release
November 26th, 2012

PRWeb transmitted a press release for ICOA that we have since learned was fraudulent. The release was not issued or authorized by ICOA. Vocus reviews all press releases and follows an internal process designed to maintain the integrity of the releases we send out every day. Even with reasonable safeguards identity theft occurs, on occasion, across all of the major wire services. We have removed the fraudulent release and turned the matter over to the proper authorities for further investigation.

Frank Strong, a spokesman for PRWeb, had no comment beyond the prepared statement.

So that’s it. If indeed it was some kind of fraudulent effort to drive up the share price on a marginal stock, it may have worked. But no one got particularly rich in the process.

(Image taken from the 1948 Daffy Duck cartoon, “You Were Never Duckier,” wherein the duck pretends to be a rooster in order to win $5,000 in a poultry contest. He doesn’t win.)


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