British security and outsourcing company G4S announced a positive trading statement on Wednesday 12 November. However the share price fell as large volumes of shares were traded before the statement after a fake announcement implied that severe accounting errors had led to huge losses.
Activists had sent out an email to influential financial journalists with a link to a cloned G4S website announcing that profits had been overstated by almost £400m and a statement that the CFO had been sacked. Journalists tweeted the results (since deleted) and thousands of shares changed hands causing volatility and a temporary 3% dip in the share price.
Guardian financial columnist Nick Fletcher realised the announcement was fake and tweeted a warning to which FT journalist Robin Wigglesworth responded.
Telegraph Business Editor James Quinn also recognised the hoax, tweeting concerns that it was being taken seriously by some journalists.
The share price did fall and the G4S press office dived into the conversation. After an hour they issued an announcement about the fake website.
The Telegraph noted that the website was registered by two Dutch men via server in Texas. Luckily the hoax occured during working hours so the G4S press team noticed the problem and were able to react relatively quickly. They issued a statement an hour later. But traders still reacted as misinformation spread fast over news platforms and social channels.
24/7 team of people detect attacks
Brand attacks like this do impact company share prices and can occur at any time of day or night, from any time zone. Some businesses have social listening software to try and pick them up but a team of people is needed to interpret the results, decide what to do and make sure the right person knows what's happening. That’s why global businesses take on Crisp’s monitoring and moderation service. We would have picked up news of the hoax anywhere it appeared across the social web and a moderation manager would have made sure the G4S press office were aware within minutes – even if it had appeared at 2am UK time and we had to wake them up.
Unfortunately it’s becoming easier for activist activity to impact company share prices. Contact Crisp to find out how we would protect your brand.