A news release heralding a major contract win that led investors to bid up shares of a small US-based outsourcing company was 'totally false,' the company, quoted by an Associated Press report said.
The Associated Press report quoted a statement released over PRNewswire before markets opened said Duluth, Ga.-based Innotrac had signed a 'multiyear, multimillion dollar' contract with German industrial conglomerate Siemens.
But less than three hours later Innotrac denied issuing the release, the report said.
A PRNewswire executive, quoted by Associated Press, said in an interview that his firm received the release from a vendor called EReleases, which distributes releases to wires on behalf of small companies that don't have their own press offices.
The founder of EReleases told The Associated Press the statement appeared to come from 'a legitimate source.'
Shares of Innotrac, which closed on the Nasdaq Tuesday at $2.77, vaulted as high as $5.64 before the Nasdaq halted trading in the stock and the company denied the release.
The shares retreated following Innotrac's statement and closed at $2.85 on the Nasdaq. The original release claimed the company, which lost money last year while bringing in revenue of $73.9 million, signed a contract to provide technical support to Siemens' wireless communications business.