United States of America eSeries: Pump and dump 📉

Pump and dump 📉

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Time for a good ol' fashioned pump and dump. Let's get into it.

by Allison Morrow

💸 CRYPTO PUMP

On Monday morning, a press release purportedly from Walmart sent the cryptocurrency litecoin surging around 25%. It seemed that Walmart would soon begin accepting the relatively obscure crypto for purchases.

The whole thing was a scam. And apparently a massively successful "pump and dump" scheme.

How it happened

Investors had plenty of reason to believe the news was true, CNN Business' Nathaniel Meyersohn writes.

A verified litecoin Twitter account tweeted out a link to the announcement, which had appeared on the press release service GlobeNewswire.
The press release looked legitimate, including (made-up) quotes from Walmart CEO Doug McMillon.
Walmart had just posted a job for a cryptocurrency expert to work at its corporate headquarters.
Several major news outlets picked up the report.

But Nathaniel, who covers Walmart for CNN Business and has an eagle eye, confirmed that the news was bogus. An hour after the announcement came out, litecoin's price fell from more than $220 back to $178 — around where it was trading before the false release went out.

GlobeNewswire removed the press release minutes after CNN reached out, and it issued a correction.

How we knew it was false

The release listed a bogus "walmart-corp.com" in the email address for Walmart's chief marketing officer.
It used a partial title for McMillon.
It was the first and only press release Walmart had issued on GlobeNewswire.
Litecoin would be an odd choice for Walmart. Although it's among the oldest cryptos on the market, it's typically not among the most actively traded — though that changed Monday when several billions of dollars of litecoin changed hands, according to Coinbase.

UNREGULATED TERRITORY

It's a classic scheme: buy an asset, hype it up with fake news, and sell it before anyone figures out it's a crock. Remember The Wolf of Wall Street? That was pump and dump with penny stocks. The scam only works in markets where investors and regulators have less insight into the goings-on day to day. These days, that's cryptos.

The crypto boom is penny stocks 2.0 – it's relatively easy to pump up one of the dozens of obscure digital coins floating around the internet. And cryptos are so inherently volatile, it'd be hard to identify a pump scheme in real time.

That is, if anyone were even watching. Cryptos trade like securities, but they are not, technically, securities, and therefore out of the jurisdiction of the Securities and Exchange Commission, Wall Street's primary watchdog.

#️⃣ NUMBER OF THE DAY

$1,000

Whirlpool is stepping up its vaccine incentive for employees: Get the jab, get a thousand bucks. Please please please.

💉 VAX OR ELSE

Late last week, President Biden forked over a big juicy steak of a deal to Corporate America.

Here's the thing: American businesses have been in a pickle lately. (Another food metaphor? Somebody get me a snack!) They desperately want to get back to business as usual, and vaccines are the way to make that happen. But there's also a labor shortage, and mandating vaccines could risk scaring away applicants who'll end up at a less-stringent rival.

Now, they can just blame Biden. Under a rule announced Thursday, every American company with 100 or more employees must mandate vaccines for workers or impose strict testing protocols.

That gives managers the arsenal they need to fix their biggest pandemic quandary. Employees have to get vaccinated or frequently tested, and companies don't have to worry about losing them.

GREAT, BUT...

Corporate America mostly welcomed the news, though some were caught off guard.

The Consumer Brands Association, a trade group that represents consumer brands such as Coca-Cola, Kellogg and Campbell Soup, had a laundry list of questions for the White House on Monday. Among them:

Does the government plan to centralize vaccination tracking?
What are the consequences of falsifying one's vaccination status or test results?
What is considered suitable documentation for a negative test result?

The trade group, which represents the $2.1 trillion food, beverage and consumer products industry that employs 2.1 million workers, urged federal agencies to move quickly and work with businesses to implement the new plan.

QUOTE OF THE DAY

Ohana if you want to move we'll help you exit TX. Your choice.❤️

Salesforce CEO Marc Benioff confirmed in a tweet Friday that his company, which employs 56,000, would help workers get out of Texas after the state passed the nation's most restrictive abortion law.

"Ohana" is a Hawaiian term for "family."

WHAT ELSE IS GOING ON?

📱 Lots going on for Apple this week:

On Monday, the company issued an urgent iPhone update to fix a critical vulnerability that independent researchers say has been exploited by notorious surveillance software.
It's the eve of the closely watched, wildly over-hyped iPhone 13 launch event.
Oh, and in case you missed it Friday: A judge dealt Apple a huge blow, ruling that the company can no longer prohibit app developers from directing users to payment options outside the App Store.

🦊 Fox Entertainment has acquired celebrity gossip outlet TMZ.

📉 Shares in Alibaba slumped after the Financial Times reported that Beijing is planning to break up Alipay, the hugely popular payment app owned by its financial affiliate, Ant Group.