A microcap lithium stock surged Wednesday as a phony press release started making the rounds among traders.
A press release from AB Newswire titled “TESLA $TSLA ACQUIRED $LTUM LITHIUM CORPORATION, A LITHIUM MINING COMPANY BASED IN NEVADA” began making the rounds. The release had a publish date of around 3 p.m. ET April 12.
“Tesla’s needs for lithium supply are increasing fast as the company is expanding production with the new factories, like Gigafactory Texas and Berlin,” the release read. “Over the last few weeks, Tesla has been rumored to have acquired $LTUM Lithium Corporation, a litium mining company based out of Nevada.”
While the press release appears to have been published through AB Newswire, 5W Public Relations is listed as the media contact.
“We do not know the origin of the press release or why our contact information is listed,” a spokesperson for 5W told Benzinga. “We did not issue this release as we do not represent either company.”
Why It’s Important: Lithium Corporation is a North American company focused on energy metals for the energy storage sector and high-tech industries. The company has a market cap under $40 million, so any hint of being acquired by a company like Tesla Inc (NASDAQ: TSLA) and its $1 trillion market cap would certainly excite shareholders.
“[C]ontrary to a press release issued by unknown parties on the 12th of April and rumors circulating on social media, we have not received so much as an expression of interest from Tesla, Inc. and no employees have left Lithium Corporation to take up employment with Tesla,” Lithium Corp. said in a statement. “We would be happy to chat with Elon if he was inclined, but presently there is no relationship between the two companies.”
This isn’t the first time a phony press release hit newswires and caused massive volatility in a security. Last September, a release claimed Walmart (NYSE: WMT) would accept Litecoin (CRYPTO: LTC) as a form of cryptocurrency payment.
Press releases rarely mention rumors about a company. This press release in particular even included some misspellings of the word “lithium.”
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