Feeds

Claimed $400m Google buyout is fake, ICOA boss warns

SEC called after hoax press release sends shares spiking

Boost IT visibility and business value

It was a lousy start to the post-Thanksgiving weekend for the management of US hotspot provider ICOA after the company fell victim to what looks like a classic pump-and-dump stock scam.

On Monday morning a press release was posted on PRweb announcing that Google was splashing out $400m to buy the firm, which operates 1,500 Wi-Fi hotspots across the US, including in high-value areas such as marinas and universities.

The story caused heavy trading in the firm's shares, but CFO Erwin Vahlsinghas confirmed to The Register that the story isn't true.

"It's a false release," he told us. "The SEC has been notified."

ICOA is firmly in the penny share category, with shares trading on the OTC Pink sheets for fractions of a cent. Nevertheless, the press release more than quadrupled the share price, and at its peak over 500 million shares were traded, indicating that someone made off with at least $200,000 in profit.

That the badly spelled two-paragraph press release announcing the deal caused such a flutter can't just be blamed on minds being slowed by the nation's turkey coma. The acquisition does make a certain amount of sense, given that Google has been active in expanding internet access and ICOA has been talking about buy-out negotiations for a while now.

ICOA stock price bump

Buy, buy, buy! No sell, sell, sell!

The case also shows the difference in economics that the internet has made to this kind of scam. When pumping and dumping shares was first tried out, it was a risky and expensive business – there were phone banks of people to hire to sell the stock, who needed housing and paying off. Nowadays all you need is a press release and a few million spam emails, and twitchy stock traders will do the rest.

Google isn't saying anything on the matter so far, but sources in the company confirmed the deal wasn't on and ICOA wasn't even on its radar. Whether the SEC investigation yields any culprits remains to be seen. ®

Maximizing your infrastructure through virtualization

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.