Shares of Twitter popped briefly on Tuesday when an article purporting to be from Bloomberg appeared online and claimed the company had received a $31 billion buyout offer. The fake story, which carried a timestamp of 11:36 a.m. EDT, caused Twitter stock to spike as much as 7.6 percent to $38.63 over a roughly 10-minute period. It nosedived a few minutes later as buyers realized the report was a hoax.
As people quickly began pointing out on Twitter—yes, Twitter—the fake Bloomberg story contained some fairly obvious problems. The story was rife with grammatical errors. Much of the phrasing didn’t match Bloomberg’s straightforward, often dry style. Former Twitter CEO Dick Costolo’s name was misspelled as “Costello.” The Web address for the page, bloomberg.market, isn’t actually used by Bloomberg.
On the other hand, the story “possessed a certain level of technical sophistication rarely seen in such efforts,” reporters at DealBook note. Visually, the article looked very similar to a standard Bloomberg story. Links in it also went to genuine parts of Bloomberg’s website. (I wasn’t able to grab a screenshot, but DealBook has a good one.)
As of late Tuesday afternoon, the bloomberg.market Web page had been suspended. According to Internet records, the address was registered last Friday through a service in Panama that masks the identity of the owner.
The Twitter incident is yet another reminder that the high speeds investors and algorithms trade at today can render them particularly vulnerable to fraud. In May, shares of Avon gained 20 percent on a purported regulatory filing about a buyout offer. After Avon clarified that there was no offer—much less one valuing the company at three times its current price—the stock fell back down. The Securities and Exchange Commission believes that ruse was executed by Nedko Nedev, a man in Bulgaria who allegedly has done the same thing twice before.
For now, the SEC is looking into the fake Bloomberg article for “possible market manipulation,” the real Bloomberg reports. Both Twitter and Bloomberg confirmed that the buyout story was fake. And after all that, Twitter actually closed up 2.6 percent for the day.