Shares of Audience Inc. (ADNC) plummeted Tuesday afternoon after a fake tweet which said the company was being investigated by the Department of Justice.
Audience Inc. (NASDAQ:ADNC) shares fell over 25 percent in just a few seconds Tuesday afternoon after someone posted a fake tweet saying that the company was being investigated by the Department of Justice.
Business Insider reports that the Twitter posts came from an account listed as Conrad Block @Mudd1waters and gave the appearance as coming from the well-known Muddy Waters short-selling firm. The account even had the same photo as the one that’s on Muddy Waters’ Twitter site.
However the firm’s founder’s name is Carson Block, and it posted on its real Twitter page that it has no connection with the person or company behind the false Twitter posts about Audience Inc. (NASDAQ:ADNC). Almost 800,000 Audience Inc. shares (NASDAQ:ADNC) shares were traded Tuesday afternoon in a short span of time. Within the previous 25 days, only approximately 108,000 of the company’s shares have traded.
Business Insider spoke with Hammerstone Group founder Jamie Lissette, who speculated that the sudden volume in trades could be partially due to traders who have computers set up to scan the Internet regularly for mentions of Muddy Waters and other big names in the financial industry with the aim of shorting the stock symbol based on the information provided.
Lissette said his firm realized that the tweet in question was false right away because the account it came from had just 11 followers. The actually Muddy Waters account had more than 7,500 followers.
Audience Inc. (NASDAQ:ADNC) is expected to release its next earnings report tomorrow. The stock is down 4 percent in Wednesday afternoon trades.