Hard evidence for the importance of fact checking
Late last month a PRWeb press release went out stating that Google had acquired Rhode Island-based ICOA Wireless for some $400 million. It’s not unusual for the big G to pick up a smaller company, so what’s the problem?
Well, how about the fact that the acquisition never happened? Here are more details on the incident, from an AllThingsD article by Arik Hesseldahl:
The original source of the story appears to be a two-paragraph press release circulated on PRWeb. There was never any kind of statement whatsoever from Google, which in a situation like this is odd. In the case of an acquisition by a large publicly held company like Google, there’s usually a joint statement that includes contact information for people on both sides of the transaction, quotations from executives at both companies, and so on. Nothing of the sort appeared here, and numerous outlets apparently reported it without so much as bothering to check with either company.
It bears all the markings of an attempt at a pump-and-dump action on a penny stock. I’m no expert in these things, but it sure looks to me like someone might have sought to use the opportunity of a slow news day after the holiday, with a lot of attention diverted to matters related to Cyber Monday and shopping, to try and cause an artificial spike in the price of a thinly traded stock.
ICOA’s stock did indeed go for a ride, climbing several hundred percent above its pre-release price for a brief window and probably landing the mysterious press releases’ author a hefty profit.
Aside from the obvious regulatory concerns, the incident raises some serious reputation management issues for PRWeb, along with the numerous news outlets that picked up the story without doing any fact checking of their own. PRWeb claims to verify the integrity of all releases, but it didn’t take long for sources to dig up several glaring examples of approved releases that were lacking in that department, to say the least.
While the ‘net certainly makes information gathering easier, it also presents countless opportunities for just about anyone to spread false news around in a very believable fashion. To ensure your reputation management is on point, fact check EVERYTHING, no matter how “trusted” the source – whether you’re a news producer or consumer, it’s just a smart thing to do.
The BCM Blogging Team