Twitter shares jump after faked Bloomberg report

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Takeover rumours about Twitter surface with seeming regularity every couple of months. One on Tuesday showed a new level of sophistication in an effort to pump the company's stock.

Shares of Twitter, the social network, briefly spiked after an article that appeared to come from the Bloomberg News website contended the company had received a takeover offer worth $31 billion. Analysts and Twitter users quickly started poking holes in the online piece and deemed it a fake. (No such report ran on the Bloomberg terminal, where its official news reports first appear.)

False takeover rumours meant to prompt a quick, temporary increase in the stock price of the company mentioned as a target have been circulated many times before, with some success. Two months ago, Avon Products fell prey to a phantom buyout bid by an unknown entity trying to pass itself off as a well-known private equity firm.

Last month, the US Securities and Exchange Commission charged a Bulgarian man with abusing the agency's online database for company filings to submit the false takeover bid for Avon and for Rocky Mountain Chocolate Factory.

And last year, shares in G4S, the British security services company, plunged after a fake statement claiming that the business had unearthed accounting problems. Such efforts try to force a short-term move in the stock, enough for the perpetrator to collect a tidy profit through well-timed stock purchases or sales.

The fake Bloomberg report about Twitter possessed a level of technical sophistication rarely seen in such ruses. The article page closely resembled a standard Bloomberg report, with many of the links going to real parts of the news organization's website.

That was enough to send Twitter's shares as high as $38.56, up seven per cent from their closing price on Monday.

Close scrutiny, however, flagged a number of questionable elements in the piece. The name of Twitter's former chief, Dick Costolo, was misspelled. The grammar seemed off. The byline was Stephen Morris, who covers British banks.

And the page's web address, bloomberg.market, is not used by the news organization. A search of Internet records showed that bloomberg.market was registered on Friday through a Panamanian service meant to keep its customers anonymous.

By late afternoon, the web page for bloomberg.market was no longer operable. An S.E.C. representative declined to comment on whether regulators were looking into the hoax.

As Bloomberg reporters noted on Twitter, the article was rife with violations of the news organization's often-rigid writing style commandments, such as the use of the word "but" in the article, for years considered off-limits.

A spokesman for Bloomberg, Ty Trippet, confirmed - including on Twitter, naturally - that the takeover article was fake.

Twitter has been a somewhat popular target for speculation about a takeover in recent months. The fake article correctly noted that the company's stock price fell in the last several months, amid questions about corporate strategy.

And Twitter is searching for a new chief, a process that can invite suitors to make takeover offers.

Still, the company has said that while it will consider acquisition bids it deems interesting, it plans to remain independent.

When asked about the false report at Fortune's Brainstorm Tech conference Tuesday in Aspen, Colo, Evan Williams, Twitter's co-founder and a board member, said: "There's probably all kinds of legal things I have to know in order to answer that question properly, so I'm just going to say that, as I said before, there is incredible potential in Twitter and blah blah blah ... the board will do what it's supposed to do."

2015©The New York Times News Service