By Anu Passary | Nov 28, 2012 12:55 PM EST
Recently, PRWeb had posted a press release that claimed that Google had paid $400 million to acquire ICOA, the Rhode Island-based public hotspot provider. However, the press release proved to be a hoax with ICOA's CEO George Strouthopoulos confirming that the report was false, but the damage was already done with the shares of the company quadrupling post the news.
ICOA's pink sheet stocks usually sell for under a penny and post the fake news grew from $0.0001 to $0.0005. Nearly 500 million shares were traded, which included a chunk of 330 million shares that were worth $225,000 by someone.
ICOA's daily share trading volume is around the 2.6 million mark. The company has notified SEC and is looking into the matter. AllThingsD reported Strouthopoulos averred that "We are investigating the source, so far it originated from Aruba!"
Earlier in an e-mail to TechCrunch, Strouthopoulos had confirmed that the news of ICOA's acquisition by Google was fake.
"This is NOT TRUE!!" said CEO George Strouthopoulos in an e-mail to TechCrunch. "Never had any discussions with any potential acquirers!! This is absolutely false! Someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles."
The press release posted on Monday, Nov. 26, by the Vocus-owned low-cost service PRWeb has been pulled down since. PRWeb.com ascribed the "fraudulent press release to "identity theft" and said that it happens "on occasion, across all of the major wire services." The site has reported the matter to authorities for further investigation.
The "fraudulent" press release it would seem was sent with the intention of increasing the share prices of a thinly traded stock. Whoever, sent out the press release intended and banked on it to be propagated by journalists without any confirmation, so that as a consequence traders would up the bid price. The fact that the press release missed key elements like quotations from senior executives from both companies and contact information for PR representatives went unheeded.
No details are currently available as to how ICOA's shareholders would be compensated.