The Fake Google Press Release

Posted Nov 26, 2012

Earlier today, Pulse2 published an article about Google acquiring a public WiFi company called ICOA Wireless.  I saw a press release about the deal, but it turns out that this was fake.  I suspected something was fishy when I visited the official Google Blog shortly after the press release was sent out and saw nothing about that deal.  This is why I quickly deleted the article after publishing it.

When Google acquires a large company, they generally post information about it on their official blog instead of sending out press releases.  However I saw other credible blogs and news organizations writing about it so I figured it must be true too.  So who sent out the press release?

The press release was posted on PRWeb, which is a free PR service operated by Vocus.  Vocus is also a public company on the Nasdaq.  Supposedly the press release originated from Aruba.  PRWeb deleted the release as a result of the craziness that followed.

It appears that someone that owns stock in ICOA set the whole thing up for a “pump and dump” scheme.  After many journalists wrote about the news based on the fake press release, traders bid the price up for ICOA.  ICOA’s shares tripled and quadrupled in value quickly after the fake announcement was made.  ICOA is a pink sheet penny stock.

The market cap of ICOA is less than $850,000 and their enterprise value is $3.15 million.  Google acquiring the company for $400 million would be way too high of a price.

The SEC halted trading of ICOA stock today.  It reached a peak of $0.05 today and the price is currently at less than $0.0001.  The volume of the stock was at 3 billion today and someone likely walked away with $1.6 million.  I’m pretty sure the SEC will investigate what happened here.