Just ignore market rumours

Rumours, as they say in the stock market, are a dime a dozen. Having been involved in the stock market for more than 25 years, I can tell you that statement is no longer true. Previously the Internet, yes; nevertheless post-Internet a dime a dozen is way too expensive. These days, stock market rumours are more like a dime a hundred-dozen.

Individual investors can at times get excited by rumours, particularly takeover rumours. Most takeover rumours have some basis as a matter of fact. Take a hot sector -- cloud computing for instance--find a company in the sector in other words growing fast, and it easy to see why it might often makes sense for a large company to buy the faster-growing smaller company.

Previous takeover in the space

If there has been a previous takeover in the space, at the time investors just might believe any takeover rumour they hear. In the example above, this was anyway you look at it the case over the past six months. Afterwards the PAR Technologies Corp. battle, just about every cloud computing company was the subject of multiple takeover rumours. TeraData, Radware, Akami and NetApp were all subject of speculation.

Where do these takeover stories originate? Just about anywhere. The Internet, a trading desk, a bar -- you name it. Clearly, specifically spreading false rumours would violate many securities laws; nevertheless investigations into these types of matters have been in the extreme difficult to prove.

The Smart Shift series

In this instalment of the Smart Shift series, Financial Post innovation reporter Matt Hartley speaks with IBM senior IT security architect Stewart Cawthray about the latest trends in Web security, from the Stuxnet worm and international cyber terrorism to risk management and preparing IT departments for the influx of the then generation of mobile devices, including Apple's iPad.