Yikes that's terrible....
It was a freaking joke, the world needs to relax!This might all backfire on Voltswagen.
Volkswagen could face securities investigation after April Fool's Day prank name change to Voltswagen 'misled investors' and caused share price to shoot up by as much as 16%
By BEVAN HURLEY FOR DAILYMAIL.COM AND AP
- Volkswagen fooled investors into thinking it was changing its name to 'Voltswagen' as part of its transition to electric vehicles
- Its share price rose by as much as 16% to over $38 as the company maintained for 36 hours the name change was legitimate
- One Wall Street analyst issued guidance saying the change 'underscores VW's clear commitment to its EV brand'
- On Tuesday the company finally backtracked, saying it was an early April Fool's Day prank to increase the hype around its first all-electric SUV
- Business experts say the Securities and Exchange Commission must investigate to send a warning to other corporations about spreading misinformation
- Volkswagen US CEO Scott Keogh, quoted in one fake press release, is a former marketing exec who oversaw Super Bowl adverts and car placement in Iron Man
PUBLISHED: 17:27, 1 April 2021
Investor experts are calling on the Securities and Exchange Commission to investigate Volkswagen after it claimed to be changing its name to 'Voltswagen' in an April Fool's Day stunt, which they say misled investors and briefly saw the automaker's share price rise more than 16%.
The German car giant, which has previously fallen foul of the SEC for fitting millions of vehicles with deceptive emissions software, claimed on Monday it was changing its name to celebrate its transition to electric vehicles.
After maintaining the ruse for more than 24 hours, in several press releases and comments to reporters, it finally leaked to the Wall Street Journal on Tuesday afternoon that the move was a prank.
The company later confirmed it had been an early April Fool's Day joke designed to hype the release of its new electric SUV.
Shares in the company had opened at $33.13 on Monday, and by 3pm on Tuesday afternoon were trading at $38.46. They were trading at just over $36 on Thursday morning.
Financial experts believe the prank could constitute market manipulation and are calling on the SEC to investigate.
Volkswagen's share price began the week at $33.13, before rising as high as $38.46 on Tuesday afternoon as fake news of its name change spread around the world.
The Associated Press reported Mark Gillies, a company spokesman, had later insisted that the release was legitimate and the name change accurate.
On Tuesday, the company emailed to reporters a press release that quoted its CEO Scott Keogh announcing the fake change.
'We might be changing out our K for a T, but what we aren't changing is this brand's commitment to making best-in-class vehicles for drivers and people everywhere,' Scott Keogh, president and CEO of Volkswagen of America, said in the release.
'This name change signifies a nod to our past as the peoples' car and our firm belief that our future is in being the peoples' electric car,' Keogh added.
Analysts on Wall Street released guidance to investors on Tuesday morning about what the new 'Voltswagen' brand might mean for the carmaker's future viability.
Wedbush analyst Dan Ives said the name change 'underscores VW's clear commitment to its EV brand'. The name change garnered massive global media coverage.
On Tuesday afternoon, an unnamed source at the automaker's headquarters in Wolfsburg, Germany, revealed to the Wall Street Journal that the press release announcing the re-branding effort was just a joke.
'It's a premature April Fool's joke. It's part of a marketing campaign for the ID.4,' the newspaper quoted one unnamed source as saying.
'There will be no name change.'
On Wednesday, VW released another statement explaining that the US wing of the company had developed the marketing campaign to draw attention 'with a wink' to 'Volkswagen's e-offensive'.
It's unclear whether the misfiring prank had sign-off from the company's German headquarters.
Deliberately misleading markets for more than 24 hours was extremely unusual for a major public company, Charles Whitehead, Professor of Business Law at Cornell Law School, told CNN.
He said: 'Will the SEC inquire? Well, of course they will. It's gotten enough publicity and people are concerned about it and there are issues about whether or not companies should be doing this that I'm sure [the SEC is] going to make a phone call.'
He added: 'This is not the sort of thing that a responsible global company should be doing.'
James Cox, who teaches corporate and securities law at Duke University, told AP that regulators had to take action.
'The whole market has gone crazy,' Cox said.
'We need to throw a pretty clear line in the sand, I believe, about what is permissible and what isn't permissible.'
The company was not responding to media queries on Thursday.
The SEC was also tightlipped about whether it was looking in to the car giant.
Just shows how fickle the stock market can be driven by sentiment rather than by facts, l bet the VW advertising guys made a few bucks or euros off the back of it.