Frankly Speaking: Unverified news fuels stock prices

This article first appeared in The Edge Malaysia Weekly, on May 4, 2020 - May 10, 2020.
Frankly Speaking: Unverified news fuels stock prices
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Greenyield Bhd recently came under the spotlight because of unverified news on social media that it was one of the beneficiaries of the rising demand for rubber gloves and condoms, probably owing to the Covid-19 pandemic.

On April 27, 2020, the company issued a statement clarifying that it is not a latex producer. Describing the article as “erroneous”, Greenyield explained that it had recently included rubber plantations as one of its business activities. It added that information on this matter can be obtained from the circular to shareholders issued on Nov 27, 2019, which refers to its proposed diversification into rubber cultivation.

Incidentally, Greenyield’s share price doubled from a record low of 7 sen on March 19, 2020, to last Friday’s close of 14 sen, giving it a market capitalisation of RM45.06 million. 

The clarification did little to dampen investing interest.

However, not all investors will always be as fortunate. They should verify the credibility of any news, especially if it is not from a reliable source.

These days, with the market looking for new leads amid the volatility, any piece of information could move share prices.

As in any transaction, “buyer beware” remains an apt warning.

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