The shares of Kandi Technologies Group Inc. (Nasdaq: KNDI) more than doubled last month, aided by an eye-popping surge in volume that followed a routine press release.
Kandi’s stock shot from $3.92 on June 4 to an all-time high of $8.50 on June 11, after the company announced that the Chinese government had approved the electric car it is developing with Geely Automotive Holdings Ltd. for sales and eventual subsidies.
Trading volume on the day that the release came out topped 18.7 million shares, an amount roughly equal to Kandi’s public float. Since then, an additional 82 million shares have changed hands.
Sharesleuth, which previously raised questions about Kandi and the people who helped bring it public, detected a spate of unusual activity on stock message boards and social media sites at the time the company’s shares were surging.
We identified a pattern of postings, on multiple sites under multiple user names, which suggested a coordinated effort to tout Kandi’s shares. Among other things, a group of new posters appeared on the Kandi message board at Yahoo Finance, issuing baseless price targets for the company’s stock, predicting an imminent short squeeze and even suggesting that Kandi was a buyout target.
We noted that several of the posters – “megsboats’’ and “stockticklers,” for instance — were touting three other companies on the Yahoo Finance boards at the same time they were touting Kandi. Those companies were Renren Inc. (NYSE: RENN), the National Bank of Greece (NYSE: NBG) and Tranzbyte Corp. (Pink Sheets: ERBB).
We also noted that at least six Twitter accounts began posting about Kandi, with a common set of messages. Like the posters on Yahoo Finance, the people behind the Twitter accounts touted Renren, National Bank of Greece and Tranzbyte, too.
Their tweets, combined with dozens of additional ones on accounts whose links led to stock-promotion sites, made it appear that Kandi had generated more buzz in social media circles than it actually had.
At the end of that week, just after Kandi’s shares hit new high in intraday trading, something unusual happened. Nearly all of those promotional posts about the company disappeared from the Yahoo boards, along with the posters. The messages promoting Kandi on the Twitter accounts we were watching also were deleted, as were some of the tweets touting Renren, Tranzbyte and the National Bank of Greece.
Although the people behind the tout campaign tried to make the messages disappear, some of their posts were preserved elsewhere, through Google’s caching system and the Nasdaq exchange’s own summary of social media posts about public companies.
Here, for example, is a tweet that was deleted from an account called @canadapetro:
Here is another that was deleted from an account called @LVhotels:
Here is a third message, from an account called @GoldMining: