Twitter Look-Alike Ticker Triggers 685% Advance in Penny StockMatthew Kanterman
Tweeter Home Entertainment Group Inc., the once-bankrupt home-entertainment retailer, surged 685 percent before trading was halted as traders confused the company with the microblogging service Twitter Inc.
The Canton, Massachusetts-based company trades over the counter under the ticker TWTRQ. Twitter, which filed for an initial share sale yesterday, will list under the ticker TWTR. Trading of Tweeter was halted at 12:42 p.m. New York time by the Financial Industry Regulatory Authority Inc. The stock rallied to as much as 15 cents, before trimming its gain to 5 cents. More than 14.3 million Tweeter shares changed hands today, the most since 2007 and an amount representing less than $1 million of trading, according to data compiled by Bloomberg.
“Somebody probably got confused ahead of the Twitter IPO and either misspelled the name of the company or mistyped the ticker by adding a Q at the end,” Larry Peruzzi, senior equity trader at Cabrera Capital Markets LLC in Boston said by phone. “The stocks like Tweeter and Lehman Brothers are out there and are completely unregulated where somebody can just buy a few thousand shares and it’s off to the races.”
Trading with Tweeter was temporarily halted as it demonstrated a misunderstanding related to the possible IPO of an unrelated security, causing a “major disruption” to the marketplace, Finra said in a statement posted on its website. Finra will notify the market when trading may resume, it said.
In the most anticipated technology offering since Facebook Inc., San Francisco-based Twitter made public its S-1 prospectus yesterday and said it’s seeking to raise $1 billion. Twitter pegged the fair value of its common stock at $20.62 a share in August.