Doug Henwood dhenwood at panix.com
Thu Aug 31 15:53:36 PDT 2000

jf noonan wrote:

>Well they caught the guy that did the fake press release which
>caused the 60% decline in its stock price last week. The CBS
>radio news report said that the prank "almost caused the company
>to fail". Now I don't know what kind of shape that company is
>in to begin with (I used to be a customer back in my VAX/VMS
>days -- I didn't know they were still in business) but how would
>the stock price tanking put them in real jepordy if they were
>profitable? It's not like Emulex had to give everybody their
>money back...

Kind of hard to tell. Maybe they would have been in violation of some loan covenant, but I suspect the reporter was just getting carried away.

Here's an excerpt from the Dow Jones wire story:

>Trading records show that Mr. Jakob shorted about 3,000 Emulex
>shares on Aug. 17 and 18 at prices between $72 and $92 each. By Aug.
>24, Emulex's stock had risen to more than $113 a share and Mr. Jakob
>had lost more than $97,000. In a sideways attempt at covering his
>losses, Jakob allegedly issued the false press release to push the
>stock price down.
>As Emulex's stock went into a free fall on the false news, Mr. Jakob
>covered his short position, realizing a profit of over $54,000.
>Minutes later, Mr. Jakob bought 3,500 shares, which he sold on Aug.
>28 at a profit of more than $186,000. In total, Jakob's profit was
>over $241,000.


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