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Fake press release causes stock to surge

Outsourcing outfit benefits
Thu Dec 21 2006, 07:39
A TROUBLED US IT outsourcing outfit saw its stock surge after a fake press release was published by PR Newswire.

Innotrac, which last year lost $73.9 million in revenue, experienced a huge gain in stock price after a news release was published saying it had won a contract with Siemens.

The statement claimed the outfit had signed a "multiyear, multimillion dollar" technical support contract with Siemens.

Innotrac normally ships packages and manages inventory for companies seeking to outsource product orders.

Shares of Innotrac, jumped from $2.77 each to $5.64 before the Nasdaq halted trading in the stock when the company denied the release.

PRNewswire said that he release came from a vendor called E Releases, which distributes releases to wires on behalf of small companies that do not have their own press offices.

Innotrac said it is trying to find the source of the press release and said it does not believe the statement came from within the company.

More here. µ

 

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