Twitter’s shares jumped more than 8% on Tuesday after a fake online story said the company had received a $31bn takeover offer.
The fake story, which fairly accurately mimicked the look and feel of Bloomberg and carried the byline of Stephen Morris, one of its writers, was posted at 11.36am eastern time. By 11.44 the shares had spiked 8%, before a Bloomberg spokesman tweeted: “Pls note - that $TWTR story everyone talking about is fake.” The shares quickly fell back to roughly where they had been by 11.50am.
While the fake story looked like a Bloomberg story, the web address was bloomberg.market not bloomberg.com. It also had several grammatical errors and spelling mistakes, including the surname of recently departed chief executive Dick Costolo, misspelled as “Costello”.
“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%,” the fake story said. “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 it’s ad products.”
The spoof site, Bloomberg.market, was registered last Friday, according to the domain search tool at WhoIs.net. The site was registered through a service called Enom.
A Twitter spokesman said the company had “nothing to add” to Bloomberg’s explanation. The site continued to pull content throughout the day from the real Bloomberg page to the Bloomberg.market home, including a story with the headline “Twitter Pares Gains; Bloomberg Says Twitter Story Fake”.
Twitter has been in managerial upheaval in the past few weeks. In June, Costolo abruptly said he would resign effective 1 July, and at the time Jack Dorsey (now the interim CEO) told investors and reporters that the search for a new CEO was barely underway. “That process has only just begun and there is no timetable,” Dorsey said. “That firm will take the time it needs to identify candidates within the company and outside.”
There has been speculation that having three former CEOs on the board (Dorsey, Costolo and Ev Williams) could be discouraging suitable candidates from the job. There appears to be tension on the board as Dorsey steps up to lead the company again: a recently released statement seemed to expressly disqualify Dorsey, also the CEO of Square, from taking the position a second time.
“The Committee will only consider candidates for recommendation to the full Board who are in a position to make a full-time commitment to Twitter,” the board wrote.
When the fake story broke, Williams was at the Fortune Brainstorm Tech conference in Aspen, Colorado, fielding questions about the makeup of the board.
It’s the second time this year that Twitter’s own ability to disseminate information more quickly than anticipated has played havoc with its stock price. In April, the stock plummeted 20% when Nasdaq accidentally released its quarterly earnings report a crucial hour before the market closed.
In May, a fake bid for another company, Avon Products, sent its shares as much as 20% higher.
This article was written by Sam Thielman in New York, for theguardian.com on Tuesday 14th July 2015 20.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010