11/26/2012 07:06 pm ET Updated Nov 26, 2012

Google-ICOA Deal That Never Happened: Press Release Falsely Claimed A $400 Million Purchase

On Monday, news broke of a run-of-the-mill acquisition for Google: It was purchasing Rhode Island-based WiFi hotspot provider ICOA Inc. for $400 million.

The problem? Just the unfortunate fact that the news was completely, utterly false.

Here's what happened: On Monday morning, PRWeb, a popular website on which companies distribute press releases, posted a notice (since taken down) announcing the "deal." "ICOA Inc. Acquired by Google for $400 Million," the release was titled, written in the dry prose that celebrates a supersized company gobbling a smaller firm for a stack of cash larger than many of us will ever see.

Soon after the press release went live, however, Google employees told Arik Hesseldahl of AllThingsD that no such purchase had occurred. Eventually, ICOA CEO George Strouthopoulos told TechCrunch, “This is NOT TRUE!!"

Strouthopoulos' insistance was likely due to the fact that TechCrunch had been snookered earlier in the day by the phony press release (as the AP and Engadget had been. TechCrunch and Engadget are owned by AOL, the same parent company that owns The Huffington Post). Strouthopoulos also spoke with Buzzfeed's John Herrman and presented a theory as to why someone -- no one's sure who exactly, yet -- would publish a blatantly false press release.

"Someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info," Strouthopoulos posited in an email to BuzzFeed. He said the hoax "originated from Aruba."

This presumed "stock promoter" was apparently familiar with the trend of a small company's stock jumping after word gets out that it's being purchased by a larger multinational firm. The party in question may have planted the Google-ICOA press release to spur just such a jump in ICOA's stock, which trades on an over-the-counter market called OTC Pink, the Wall Street Journal noted. Unfortunately, the release forum wasn't looking over the author's shoulder, and several news sites took the release at face value.

"PRweb will publish anything if you just pay the fee," HotStockMarket pointed out on Twitter.

ICOA's stock spiked to a high of 5 cents from 1 cent on Monday, Buzzfeed reported. ICOA has informed the Securities and Exchange Commission about the false press release, The Hill reports. The company's stock fell back down to 1 cent before the SEC halted trading.



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