Imax jumps briefly on fake news of acquisition

Posted Sep 30th 2009 3:40PM by Zac Bissonnette
Filed under: Scandals

A fake press release circled the internet this morning, reporting that Disney (NYSE: DIS) was acquiring Imax (NASDAQ: IMAX) for $1.5 billion -- a premium of 90% to the company's market capitalization.

Shares of Imax jumped 6% on the news, but it was quickly squashed by the company which said in a statement that "[Imax] has not been acquired, nor is it in discussions with The Walt Disney Company about a potential acquisition."

There are a couple possibilities here. One is the pump and dump scenario, where someone bought a bunch of share -- or options -- hoping to pump up the stock price ever so briefly, cash out, and book a nice windfall before the stock came back down to earth.

It could also be a high school student prankster -- which turned out to be the case with the Steve Job heart attack rumor that was originally assumed to have been part of a nefarious plot by evil short sellers. You can read a chunk of the fake press release here -- which might just go down as one of the worst forgeries in history: "The acquisition price represents a 90% premium to Marvel's current share price and although that seems high, IMAX just paid off their debt and have cut their expenses dramatically."

Hint: Companies make a lot of dumb acquisitions -- and they usually overpay. But I've never seen one note in its press release that the price is high.

Based on that, I'd have to go with the "high school prankster" hypothesis over the nefarious cartel of market manipulators.

Tags: dis, disney, imax