Stock in wireless hotspot provider ICOA quintupled when news reports began circulating Monday morning that Google had acquired it for $400 million. The only problem was the report was a hoax.
A Google spokesperson told us the company had not acquired ICOA for any amount and ICOA's chairman and CEO also told us directly that news of the acquisition was "absolutely false."
PR Web, a widely used press-release distribution service, had distributed a release announcing the acquisition. A representative at PR Web could not immediately be reached for comment, although a recorded message instructs callers to contact companies mentioned in press releases about any questions related to a release.
A Flurry of Reports
Based on the hoax press release, news media quickly began reporting the acquisition as fact. ZDNet was among the first to report the story. Forbes also reported on the "acquisition" and GigaOM offered reasons why Google would acquire the company. The Associated Press moved a story, then later retracted it.
PC Magazine offered a statement from Google taken from the news release, reporting "Google said it made the acquisition to 'further diversify its already impressive portfolio of companies.' The Web giant did not elaborate about its motivation for the deal."
ICOA, a penny stock trading over the counter, spiked to quintuple its value, trading at 5 cents a share before the acquisition was denied.
The Truth Comes Out
George Strouthopoulos, chairman and CEO of ICOA, told us the press release was a hoax.
"We are investigating the source, so far it originated from Aruba," Strouthopoulos said. "This is not true. 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. ICOA will report this to the proper authorities."
Who Is ICOA?
ICOA, Inc. (www.icoacorp.com) is based in Warwick, Rhode Island. The company's website says that as of 2006, it owned or operated broadband access installations in high- locations like airports and hotels across 45 states, also providing back-office solutions for hotspot operators and wireless service providers.
However, the most recent press release on ICOA's site was from December 2010, indicating the company has not been very active in recent years, at least on the PR front. Thus, it's rather ironic that a bogus press release would put the company at the top of today's tech and business news.
Questions still remain at this hour as to who issued the phony news release and whether it was done intentionally to manipulate the near-zero price of the company's stock.