- Wealth PMS (50L+)
So there’s some rumour abuzz about KPIT Technologies and it’s price has just gone a little berserk. In a clarification to exchanges about why its price went up suddenly, it has written:
We understand that yesterday CNBC Awaaz, a media channel, carried a news item stating that KPIT is going to be acquired by some other company. Possibly, the spurt in volumes is on account of that news. There is absolutely no substance to this news.
This is the third or the fourth time that this channel has carried such a news relating to us. Last time when they carried this news, we spoke to the news channel about this irresponsible reporting and the channel apologised to us for carrying this news. We are really surprised that the channel did the mischief again yesterday.
We are examining legal options for a suitable action against this channel. We would like to know from you whether, in such circumstances, the exchange can also proceed against the channel for such malicious and fictitious news propagation.
If this is true, then there should be an investigation into the channel’s behaviour; but the freedom of the press (whatever little we do have) ensures they won’t have to face any penalties.
It is usually strange for a company to get so antsy about a channel reporting news that is positive for the stock price. They should have just said, relax, we have nothing to say.
The only reason they would be so ticked off is if the news was actually true. Or, worse, that they want you to think the news is true by denying it. (Massive game theory in action?) Strangely again, there is no “sudden” spurt in price. Only some volume, but that seems to be a single day. And yesterday (21 April) the stock made a sudden jump of 5%.
In KPIT’s case, Management has sold part of their stake in Dec/Jan and FII’s own 42% of the company. It’ll be interesting to see where this goes:
Disclosure: Long the stock.