First Round: Phantom Filings

First Round and US market watchers were intrigued several weeks ago by the curious case of the phantom bid for cosmetics giant Avon.  The New York – listed firm saw its shares rocket more than 20 percent to almost $8 on the morning that a group going by the name of PTG Capital Partners made a securities filing claiming that it had made a bid for the company which valued Avon at $18.75 a share. 

Avon said it had received no such bid and, according to US reports, had intimated that the mysterious PTG Capital was quite probably a hoax. Despite the fact that word got round pretty quickly through the trading day that the bid approach was indeed probably an elaborate hoax, the stock still ended the day 6 percent up at $7.07, meaning that someone somewhere had made a tidy sum on selling out. Whatever the truth, the episode certainly proves one thing beyond doubt in First Round's mind: there's is no fool like an optimistic fool. 

But there are also a few other interesting thoughts that crossed First Round's mind in terms of this curious incident.  First and foremost, perhaps the hoax was not so elaborate after all, considering the filing was full of typos.  Second, what could PTG possibly stand for? 

No one would be dumb enough actually confuse it with Texan private equity giant TPG would they?  Third was:  If there's (alleged) funny business going on with a market-moving bogus bid, who better to blame it on than a big bad private equity buyout firm that doesn't even exist. If US press theories  are correct, and these phantom 'private equity types' did indeed make a Proper Thorough Go (see what First Round did there) at hoaxing the market to elevate the price of their stock exit, then they should not perhaps be too pleased with themselves just yet.

If the FBI can spend almost a decade compiling a dossier on alleged corruption at FIFA before striking, it doesn't take too much of a leap of faith to imagine the even more  terrifying SEC springing into action at some point. PTG, whoever you are, you have been warned…