Every once in a while something will happen in the stock market that makes you wonder if the “game” is either rigged, or on the opposite spectrum, if anyone really knows what the hell they are doing! Such an event occurred last week, and the more I read about it the crazy it gets. Late last week, Avon surged because of a fake buyout by a fake company!
As CNBC reported,
Earlier on Thursday the latest buyout hoax hit Avon Products. The stock was halted three times after reports surfaced that the cosmetics company might be acquired by a “PTG Capital Partners” for more than $8 billion.
Avon shares surged on the news, at one point as much as 20 percent. Then everyone did some quick research and discovered that no such firm exists. It was a hoax.
While I guess you can say that the market worked itself out since it took 30 or so minutes for people to realize what was going on, but even that seems too long! It seems like it should have been known almost instant that the press release was a hoax considering PTG isn’t even real! Doesn’t it seem like the real market movers, hedge funds and pension plan managers would have heard of a private equity firm that was large enough to buy out Avon at a market cap of of $3billion?