An absolutely incredible mover today, Petros Pharmaceuticals (NASDAQ:PTPI) has seen some of the most impressive price action I’ve seen in some time. This morning, PTPI stock surged more than 260% on reports that the company would be acquired. A press release was sent out, and investors cheered the news accordingly.
However, after a series of halts, Petros came out with another press release. This time, the company said that the initial press release was fraudulent and not issued by the company.
Again, Petros is not the subject of acquisition at this time. Additionally, Henry Crown, the purported counterparty for this acquisition, has never had discussions with Petros, according to Petros’ recent release.
Let’s dive into what investors ought to make of this whole debacle.
PTPI Stock Skyrockets, Plummets on Same Day
Petros closed yesterday trading at around 80 cents per share. This morning’s surge to $2.88 per share, spurred by reports that PTPI stock would be taken out by Henry Crown for $3.25 per share, made sense given the “news.”
However, this stock’s fall back toward the $1 level following Petros’ denouncement of the initial press release has obviously concerned some investors. How a fraudulent press release got sent out is not known right now. We will likely hear more about this. The U.S. Securities and Exchange Commission (SEC) generally doesn’t take these matters likely. Therefore, we rarely see these kinds of shenanigans.
But they do happen.
For investors who were bamboozled by this release, it’s unclear what remedies will be made available. Nonetheless, I expect we’ll hear more about this in the near future, as regulators probe this fraudulent report.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.