The Dayton Hudson Hoax

On 23 June 1987, P. David Herrlinger, a 46-year-old investment adviser working out of Cincinnati, called up the Dow Jones News Service and informed them that he represented a large private investment firm which was about to offer to buy the retailer Dayton Hudson for $6.8 billion. The news immediately triggered a $9 spike in the company's stock price.

The news turned out to be completely bogus. Herrlinger had apparently made the call after suffering a mental breakdown. When his co-workers asked him what he was doing, he replied, "We're going to make some money," and when confronted with the obvious fact that he lacked the financial resources necessary to make a $6.8 billion offer on Dayton Hudson, he commented, "An offer is really an intangible thing."

Herrlinger, through his lawyer, later argued that Dow Jones bore the responsibility for disseminating the fake takeover bid, on the logic that they should never have believed him in the first place. In the aftermath of the hoax, many expressed concern at the ease with which a single irrational individual had been able to manipulate the market.


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