With news being strategically leaked earlier today that Microsoft and Yahoo had resumed talks again (although over what seems to be depending on which leg of the Chinese whisper you listen to), Yahoo shares bounced to close at $22.04 after trading as high as $23.07. Volume was double the already relatively high due to past rumors average trading figure of 39.3 million, at 85.7 million.
Somewhat amusingly some have suggested that blogs have the power to create millions (or billions) in wealth by breaking stories of strategic market importance.
Here's what I see: some blogs, greedy to be first at anything, are serving as the playthings and patsies of stockholders wanting to make a quick buck. Notably that includes positive and negative news as well, because with "exotic" market trades, smart people can profit in either direction.
Blogs are the new email stock scam.
I won't pretend that I have anything more than a basic grasp of US Exchange law, but I've got an idea how it works in my native Australia, and pumping stock in this way is illegal. Blogs running the stories may not be in the wrong, however unlike email carriers blogs make a decision to publish this content, so complicity might be provable.
I'd note that The Inquisitr, like many other blogs, has also run the story, although in our case it was based on reports elsewhere. Ultimately the decision between stock scam and news isn't always clear, and I don't regret the story being here. However primary sources of so-called leaks need to start thinking as to whether they are really that clever in "breaking" such stories, or whether they are simply helping someone manipulate the share price for personal gain.
Update: CNBC quotes a source claiming that the rumors are untrue.