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How One Fake Story Added 8% To Twitter’s Value In 10 Minutes

2015-07-15 15:10

Don’t believe your company can be affected by things that occur on the internet?

Think again!

I’m not even talking about hackers in this instance. Nope, no defacements. No data breach. No DDoS. No attack on your website or systems.

Instead, I’m talking about what might be called a variation of the pump and dump stocks scam, the old ruse in which scammers would pick up next to worthless penny shares and then hype them up via spammed out emails, sent to thousands of potential investors in the hope that they would then drive up the price of the stock.

Only in Twitter’s case the stock is far from worthless and no emails were sent.

So what happened?

Well, yesterday, the company saw a huge surge in the value of its share price, at one point rising from $36.80 to $38.60 in less than 10 minutes, all off the back of a story saying the company had received a $31 billion buyout offer.

Sounds great doesn’t it? After all, analysts put the company’s worth at $25 billion so that’s a pretty good mark-up for the brand’s goodwill isn’t it?

Sure, of course it is, but there is a snag – the story wasn’t true.

Ah, I hear you say, why would the share price rise so quickly then? Surely no investor would be so naive as to believe a fake story. Well, normally that may well be true but in this instance the story appeared to come from an eminently respectable source: Bloomberg News.

Only it didn’t.

Instead, the story appeared on a rather accurate clone of Bloomberg News, using a similar URL of bloomberg.market. Now, if you don’t already know, the latter is not a Bloomberg domain but rather a subdomain belonging to an altogether different site under someone else’s control.

If that wasn’t enough to give the game away, eagle-eyed investors would have noted grammatical and spelling errors in the body of the text:

Last month, upon announcement that chairman and co-founder Jack Dorsey would be appointed interim CEO while they searched for a new leader, Twitter stock rose 8%,. It was a clear signal from Wall Street that it was happy the company decided to part ways with ex-CEO Richard ‘Dick’ Costello. Under his leadership the company struggled to add new members and generate more revenue from its ad products.

Alas it appears many people (or automated systems designed to buy and sell stock based on breaking news stories) failed to notice the misnaming of Dick Costolo or the incorrect web address – and so the buy orders went in.

Ultimately, the price dropped off after Bloomberg revealed how the story was fake, though Twitter was still up around 2.5% when the markets closed. According to Bloomberg, the SEC is now investigating.

So, what can you take away from this story?

Well, there is the fact that the internet now has a tremendous influence on our lives and the fact that a great many people believe whatever news it brings their way. This can be a problem for many reasons – it can, as we’ve seen here, affect share prices. It can also have an influence on how your brand is perceived. It can also encourage people to find the news in the wrong places, via Trojan-infected websites, phishing emails and suchlike. Are your staff among them?

Also, it highlights how many people must have visited a spoofed website. What if that was your bank account? Would you have entered your account details if the web page looked convincing? Do you check URLs in your browser all the time or just assume you are on the correct website? Are your staff as security-conscious as you are?

Food for thought, eh?


Source: 3962=p?/hctawytiruces/ei.gnitlusnochb

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