A fake news story posted to an Internet stock message board last week perplexed investors and has wreaked havoc for Chinese Internet portal Sina.com.
Despite reporting better-than-expected third-quarter results and providing better fourth-quarter guidance than Wall Street, Sina's shares fell as much as 5 percent during interday trading last Tuesday. Finding a plausible reason for the volatility of the stock was difficult until you looked at the Sina stock message board on Yahoo. At 12:58 p.m. EST Tuesday, a user posted what was alleged to be a Reuters story. According to the story, Goldman Sachs had issued a research report on "several China-focused Internet media firms" and the report was "bullish on long-term Internet usage and market growth for such companies."
"Coverage of Sina was initiated with market underperform because of valuation. The [Goldman Sachs] report said: 'While we are confident revenues and long-term earnings for Sina will increase sharply in the next five years, we believe current equity values are inflated,' " the supposed Reuters story read.
Poorly written and containing blatantly false information, the story was a fake, and readers quickly questioned its authenticity. The hoaxer put both the Reuters name and the bylines of two of the wire service's reporters on the story. Many people on the Sina stock message board posted notes saying they had contacted or would contact the Securities and Exchange Commission about the matter.
Reuters was quick to blame the anonymous poster. "Unfortunately, in today's era of electronic communications, it is far too easy for someone to create and place false content on the Web and attribute it to a reliable source such as Reuters. That is what transpired in this circumstance," Reuters said in a statement issued to The Post. "As soon as Reuters knew of the problem, it contacted Yahoo, which removed the false item," it continued.
Yahoo eventually removed the post after numerous complaints from investors, but the company did not say what, if any, action it would take.