Rumors of Samsung pitching a bid to acquire BlackBerry haven’t been anything new over the past few years. However, the latest rumor from Reuters sparked a massive spike in BlackBerry’s shares the day of the rumor.
BlackBerry saw it’s per share price rise by 30 percent, which later fell by 20 percent once BlackBerry denied the rumor.
Regulators from the US and Canada are now investigating the matter to determine whether the rumor was created for profit.
“The Securities and Exchange Commission and the Ontario Securities Commission are in the early stages of examining trading activity around the time of a report by Reuters in January that Samsung was pursuing a takeover of BlackBerry for as much as $7.5 billion, according to people familiar with the matter. Investigators are looking at whether someone deliberately fed information to reporters at the news service for the purpose of profiting on the resulting stock increase, one of the people said,” reports The Wall Street Journal.
It will be interesting to see if the regulators can find any tangible evidence the rumor was devised to capitalize off the expected rise in share price. Perhaps, they will be able to view what accounts may have had a sweeping sell trade that day.