Thursday, January 16, 2014

Always Do Your Homework

Earlier this week, Google announced it was paying $3.2 billion for a company called Nest Labs, which makes smart thermostats and smoke alarms for home use. Shortly thereafter, the stock with the ticker symbol NEST shot through the roof. It increased in value by nearly 20 times on Tuesday.

One problem: NEST isn't Nest Labs. It's the symbol for Nestor Inc., a Rhode Island-based company that sells traffic systems to local governments. Nest Labs was a privately held company that had talked about an IPO but never sold its stock to the public. Nestor was a company that had gone into receivership in 2009.

Nestor's stock price has settled back down to around four cents per share, but that's at least a little higher than it had been trading. It's quite possible that some of those investors still don't know that they didn't buy Google's latest acquisition.

No comments:

Post a Comment