Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Edward Pastorini and the Gold Fields sting of April 2007

Commodities / Gold & Silver Apr 13, 2007 - 11:46 AM GMT

By: Adrian_Ash

Commodities

Investors are moving in on BIZO as acquisition completes...

"Shares climbed 110% yesterday and 14% today. Watch for more news tomorrow and get ahead of this new campaign..."

Or rather, that's what the latest batch of junk-and-pump emails to hit our servers here at BullionVault would have you believe.

Ramping stocks is illegal, of course. Buying into the hype is stupid. Getting one of the world's major news organizations to do both for you at once...well, perhaps that's genius.


" US financier Edward Pastorini may lead a bid for Gold Fields Ltd, the world's fourth-largest gold producer, to profit from the rising price of bullion," reported Bloomberg on Wednesday morning.

"The LBO firms, corporate raiders and I feel that gold is going to rise to over $1,000 an ounce over the next two to three years," Pastorini reputedly told the newswire by email from San Francisco . Only he wasn't in San Francisco by the time Bloomberg spoke to him by phone. Somehow, he'd already gone to Florida .

Or rather, somebody had.

"I prefer to stay private," Pastorini explained to Bloomberg, "which is what I have managed to be for over 25 years in the mergers and acquisitions business. That's how my partners and I like it. I keep my name out of things and simply do the work behind the scenes."

Pastorini's laudable discretion also explained why Bloomberg couldn't confirm his identity with any US stock market filings, its own database, or even Google. He's so secretive, it seemed, he's invisible!

But the story did check out with a second source, that "gold standard" of investigative hackery. Bloomberg was also sent a 3-page document confirming there'd been a bid approach, apparently from one of Gold Fields own executives.

So Bloomberg published. Now it's been damned.

"It happens [to] all media organisations," sniggered the Financial Times online – "the FT included. Whether it's high market jinks or financial skulduggery, the fact is people make up stories and sometimes newswires and newspapers swallow them."

But swallowing stories – hook, line and sinker – can stick in your craw if you also buy into the stock. Gold Fields' shares jumped 11% on the story as some 10 million shares changed hands. That added $940 million to GFI's market cap. But by the end of US trade, once the scam had been spotted, the shares were back down to the day's open.

Why fool Bloomberg and Gold Field shareholders? The stock's options prices, according to one blog, warrant investigation. Bloomberg now faces legal action from GFI shareholders, or so today's press reports would have us believe. Now the newswire's No.1 rival, Reuters, adds that the South African stock exchange regulator is going to look into "a possible contravention of section 76 of the Securities Services Act that prohibits false and misleading information being published."

Gullibility is its own punishment, of course. Bloomberg itself now admits that the Florida phone number used during the "Pastorini" interview was previously used to ramp a hoax takeover bid for Zapata Corp., a US fishing company, in 2003.

Ramping stocks through email is an inconvenience to most investors. Ramping stocks through the respectable media, however, can really hit the jackpot. Last weekend, the Sunday Express reported a potential $50-billion bid for Dow Chemical. The UK tabloid isn't known for its US business scoops. But Dow's stock rose nearly 5% on Monday regardless. Volume was more than four times the daily average.

Back in 1987, as the Toronto Globe & Mail recalls, Dow Jones got a phonecall saying the retailer Dayton Hudson Corp. was about to receive a bid for $7 billion. "Hours later, after the company's stock soared," says the paper, "Dow Jones reported that the circumstances surrounding the bid were 'cloudy'. A bid never surfaced."

Two years later, Reuters said that an "unknown group of investors" was bidding for US airline giant, Pan Am. The newswire's proof? It had received a fax! Trading in Pan Am's stock was suspended. Reuters let the story drop, unable to verify it.

Fast forward to April 2007, and "this is evidence of the frothiness of the market," says John Turner – head of Fasken Martineau DuMoulin, the mining group – of yesterday's Gold Fields sting. "People have been making so much money for so long that they are getting careless."

More money – careless or otherwise – really is pouring into gold-mining M&A, however. Last year saw a record $17 billion spent by gold mining firms digging for ore on the stock market, rather than in the ground. The upshot, however, isn't quite what you'd expect.

Fresh from buying up Bema Gold, for instance, Kinross just gave fresh 2007 guidance for output and reserves. KGC now expects to produce 1.65 million ounces per year, up from 1.5 million as previously announced. Yet Bema itself was producing 230,000 ounces of gold annually.

What happened to the difference? Perhaps, as with most corporate activity, the whole simply doesn't equal the sum of its parts. Just ask anyone still holding GlaxoSmithKline, six years after it was born of the greatest merger (then) in history...and six years after the stock topped out.

Still, at least the story stacked up at the time...unlike Edward Pastorini's Gold Fields sting.

By Adrian Ash

BullionVault.com

Gold price chart, no delay | Gold prices live | Latest gold market news

City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is managing editor of the free Gold News service and also head of research at www.BullionVault.com – giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2007

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in