Fake News: Kansas City Southern Shares Stung By Mysterious Disappearing Buyout Report Tyler Durden Sun, 08/16/2020 - 10:45
Kansas City Southern stock rocketed higher last week on news of a possible increased buyout bid for the company, published by a little known Spanish media website called El Negocio. That news now appears to be fake.
The company had already been the subject of a late July report by the WSJ that claimed Blackstone could bid for the company at a valuation of $21 billion. This week's El Negocio report claimed that the valuation of such a transaction could be $3 billion higher than expected, sending shares on a tear higher.
But shortly thereafter, analysts began to cast a light of doubt on the source of the information, according to Bloomberg. The day after the second report was released, it had been taken down from the website where it was published.
Credit Suisse analyst Allison Landry said: “We’re not really sure what to make of this. What we are struggling with is why a Spain-based media outlet is reporting on this; it would make more sense to us if it were a Latin American news source.”
Blackstone spokeswoman Paula Chirhart said Wednesday: “While we never comment on deal speculation, this appears to be a fake news website. We’ve never heard of this organization and they did not contact us ahead of publication.”
Bloomberg tried to reach out to El Negocio and said that when they called the "news organization" that "a man who said his name was Albert answered and asked the reporter to call back in an hour."
The organization's Twitter account in unverified and its Facebook page lists a well known street in Madrid as its location, without providing an address. The link to its address sends users "to a Google maps page giving directions between the cities of Madrid and Cordoba," Bloomberg reported.
The incident is the latest in a string of fake news reports and fake buyout offers that have been published online or, even in some cases, submitted to EDGAR, to temporarily manipulate the price of a security. In many recent cases, like the fake acquisition bid made for BlueLinx holdings, there doesn't appear to be regulatory follow up from the SEC.
And so if you're a Kansas City Southern shareholder that was stung by this "report", we wouldn't hold out hope for justice. Rather, it was likely a worthy learning experience and lesson in exactly what our public markets have now become.
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