Volkswagen Prank Not Just Fun and Games

Tim Healey
by Tim Healey

As you know by now, Volkswagen pulled the wool over the eyes of the automotive media, the business media, and the general public in a terribly executed April Fool’s Day prank over the past few days.

The company may have done more than anger a few people — it may have run afoul of regulators.

It’s one thing to have journalists and car enthusiasts angry on Twitter. VW could brush that off easily enough. But according to the Associated Press, Volkswagen may be in trouble because its fake statement moved the market.

From the AP:

“The fake release could land Volkswagen in trouble with U.S. securities regulators because its stock price rose nearly 5% on Tuesday, the day the bogus statement was officially issued. Investors of late have been responding positively to news of companies increasing electric vehicle production, swelling the value of shares of Tesla as well as of some EV startups.”

James Cox, a professor of corporate and securities law at Duke University, told the AP that the Securities and Exchange Commission should take some sort of action against VW. He said this kind of misinformation can cause the market to be warped.

“The whole market has gone crazy,” Cox said in the article. “We need to throw a pretty clear line in the sand, I believe, about what is permissible and what isn’t permissible.”

The article then reminds us of Tesla CEO Elon Musk’s shenanigans in 2018 when he tweeted that he had funding to take the company private. He, of course, had no such funding lined up, and Musk and Tesla both agreed to pay $20 million in penalty fees.

On the other hand, maybe VW has no reason to worry. Another professor, this one a business and law professor at the University of Michigan, points out that for the SEC to penalize VW, the company would’ve had to have been knowingly trying to manipulate its stock price, as opposed to using an incredibly terribly executed April Fool’s gag to market electric vehicles.

This gentleman, Eric Gordon, then gave the AP reporter one of the better quotes I’ve seen today (it’s early, though): “I don’t think the SEC is going to see this as stock price manipulation any more than when General Motors or Ford or Toyota or anybody talks about their (electric vehicle) future,” Gordon said. “It is incredibly stupid, but if being stupid were illegal, a third of the CEOs in the U.S. would be in jail.”

As I wrote yesterday evening, it’s common for companies to perform April Fool’s Day pranks. It is very uncommon for companies to deliberately lie to reporters when asked to confirm if a prank is actually a joke.

Especially a company like VW, which has that whole diesel-emissions scandal baggage hanging over it. While it may seem like it happened ages ago, that scandal became known to the public less than six years ago.

I’ll close it out with one more quote from the world of academia via the AP: “The problem is that in the short run, you can fool people, and it seems cute and entertaining. But in the long run, you really do need positive and good relations with the media. For a company that already has credibility problems, this is really a strange move,” said Tim Calkins, a clinical professor of marketing at Northwestern University.

April 2 can’t come soon enough.

[Image: Voltswagen Volkswagen]

Tim Healey
Tim Healey

Tim Healey grew up around the auto-parts business and has always had a love for cars — his parents joke his first word was “‘Vette”. Despite this, he wanted to pursue a career in sports writing but he ended up falling semi-accidentally into the automotive-journalism industry, first at Consumer Guide Automotive and later at Web2Carz.com. He also worked as an industry analyst at Mintel Group and freelanced for About.com, CarFax, Vehix.com, High Gear Media, Torque News, FutureCar.com, Cars.com, among others, and of course Vertical Scope sites such as AutoGuide.com, Off-Road.com, and HybridCars.com. He’s an urbanite and as such, doesn’t need a daily driver, but if he had one, it would be compact, sporty, and have a manual transmission.

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  • Scoutdude Scoutdude on Mar 31, 2021

    Truely hilarious, so the AP reporter found a professor that supported what they wanted to write, though at least they had the decency to include the other side too. “The whole market has gone crazy,” Cox said. On this point he is correct but it is the market that has gone crazy, ie the investors that are crazy. The fact that shares moved up 5% as this got around proves that there are a lot of irrational investors in today's market. Unfortunately those irrational investors frequently drag the rational ones along with them. The fact that the stock price did see a nice movement upward does point to the fact that this stunt was very successful in getting VW wide ranging press and more than a couple of people thought it was a good thing.

  • Lou_BC Lou_BC on Mar 31, 2021

    Looks like the stunt worked. Share price is up and people still talking about it. As far as maintaining a good relationship with the media, the past cheeto-in-chief stoked a negative relationship to his advantage. If "serious" journalists just walked away, this would have died a quick and quiet death.

  • Tassos On the SERIOUS Side: A Reliable ROlls ROyce never imported in the US was the V12 CENTURY. Now you can import 25+ year olds, which may be OK for Tim but NOT for us who need an UP TO DATE vehicle. The Century was a top exec car with a SUMPTUOUS interior, far superior even to the Lexus LS. UNfortunately, the latest century model is a Rolls Royce CULLINAN CLONE SUV, which I would not be dead driving. I suggest Toyota EXPLOIT their experience with the Century and produce a FLAGSHIP SEDAN that will be EQUAL to RR in luxury AND far better in RELIABILITY and at half the price of buying AND 10% of the cost of OWNING due to much less repairs. I am SURE the market is so small in this segment, that they will NOT do it, and deprive us of this LEGENDARY Vehicle in the Future As well.
  • Lou_BC I pulled over into a road side rest stop once because the rain got so bad that I could barely see. Several other vehicles followed. As I sat there in my F150 watching, a Corvette wailed by. How could they not feel the vehicle hydroplaning? The steering on my heavy truck with excellent tires felt numb.
  • Lou_BC Maloo GTSR W1
  • MaintenanceCosts E34 M5 3.8. Not sure there has ever been a more charismatic engine than the S38B38.
  • 28-Cars-Later Sadly, fewer motorists bothering to buy insurance [because they are unwanted illegal aliens] will likewise be used as an excuse to raise rates on those that do.
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