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Rampant Buyout Rumors False 100% of the Time This Month
CNBC.com | September 28, 2010 | 02:46 PM EDT

Think you’ve got a hot tip on a buyout rumor? Think again. None of the rampant deal speculation in the market this month has come true, according to StreetAccount.com, a subscription service for trading professionals. The service said in a note to subscribers today that of the 74 rumors this month that it has reported on, none have come to fruition.

“This is precisely why I don’t invest on potential takeouts,” said Patty Edwards , founder of money management firm TrutinaFinancial.

Theories abound on why rumormongering is so rampant (and so wrong) these days. Some blame the massive social networking sphere, where one "tweet" can sink a stock like the Titanic. There’s also the fact that trading volume has been below average for the last month and for most of the last year, making it easier for nefarious participants to move a stock.

The real reason is most likely that deals are actually taking place. Companies have a record amount of cash on their books and their putting it to use. Global merger and acquisition volume last month hit $281.6 billion, the highest August amount on record and more than double from a year ago, according to Dealogic. That trend has continued this month with Walmart, Southwest Airlines and Unilever announcing deals just Monday alone.

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