HOW TO SPOT A FAKE PRESS RELEASE
NEW HAVEN, CONN. (SatireWire.com) — Investors learned a brutal lesson last week, when a false press release sent stock in data networking company Emulex down more than 50 percent. The release, sent out over Internet Wire, claimed the company's chief executive had resigned, and said Emulex had been forced to restate past earnings. The story was picked up by news services, which failed to verify the release with Emulex, and before it was over, $2.5 billion had been lopped off the company's market cap.
In an effort to help investors and journalists spot a potentially false press release, SatireWire has chosen a release at random from Internet Wire, and red flagged comments that should tip you off that something is seriously wrong. Just mouseover anything underlined in red.
Authentic Company Press Release
SOURCE: CoaxialCable Corp. (Nasdaq CCCO)
CoaxialCable Corp. Restates Earnings Way Downward; CEO Arrested; Stock a Definite Sell
Los Angeles, Cal. (internet Whyer) — CoaxialCable Corp. (Nasdaq: CCCO) today announced it is restating its third quarter revenues downward by at least 800 percent, and admitted the company's CEO and its entire board of directors have been arrested for major stock fraud, which means everyone should sell their CoaxialCable Corp. (Nasdaq: CCCO) stock right away.
"This is for real," said Chad Chumley, CFO of CoaxialCable, who urged investors to IMMEDIATELY SELL their CoaxialCable Corp. stock (Nasdaq: CCCO) and not ask too many questions, or even any questions, about this press release. Chumley also insisted that reporters not call the company to verify this release, "out of respect, because we are all in shock and can't even think straight and will probably deny it."
In addition, said Chumley, CoaxialCable stock (Nasdaq: CCCO) is for sure a BIG-TIME SELL. "I'd put in a market order because this baby is going to tank so fast you don't want to get stuck with worthless stock."
According to actual CoaxialCable Corp. officials, the company initially reported third quarter revenues of $155 million and per share earnings of 0.95 cents. As a result, its stock price rose nearly 20 percent to an all-time high of $89.50. However, after a review of accounting procedures, it turns out revenues were really like $2.2 million, and per share earnings were -$2.50, or maybe even $-11.50, so if you can sell this stock for anything over $2 you'll be lucky.
If that's not bad enough, the company also said its CEO, Arlene Infiltrata, and its seven-person board have been arrested and will be found guilty of stock fraud, pending an investigation by the SEC, which will cost the company even more money, resulting in a further decrease in revenues and force the company into Chapter 7 bankruptcy.
Said SEC Commissioner Arthur Levitt, who really said this: "Frankly, we're astonished at the level of corruption at CoaxialCable Corp., and have to wonder why anyone would still be holding this stock after reading this far in this very authentic press release."
Levitt added that he is on vacation, and pointed out that if you call his office and someone answers the phone claiming to be Arthur Levitt and denies he ever said this, that person is an imposter because "I'm out of town, so you know it's not really me."
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