Hunterbrook Report Alleges Fake News Network Behind Papa John's Buyout Rumor

Papa John’s International Inc (NASDAQ:PZZA) shares are trading lower Wednesday afternoon as the market digests the aftermath of a debunked takeover rumor and weak fundamentals. The stock's decline follows a brief surge Monday caused by false reports claiming TriArtisan Capital Advisors was leading a $65-per-share buyout bid.

• PZZA shares are sliding Wednesday. Get the market research here.

What To Know: On Wednesday, investigative outlet Hunterbrook Media alleged the fake news was part of a coordinated “market disinformation scheme“. Hunterbrook linked the fabrication to a network of “pay-to-play” websites, reportedly operated out of Dubai by U.K. nationals.

The outlet claims the hoax was designed to manipulate the market, noting that well-timed call options could have yielded significant profits from the volatility.

The report, dubbed “PZZA Gate,” alleges that digital marketer Sam Allcock and associate Danielle Trigg were key figures in the network. According to Hunterbrook's forensic analysis, the two were linked through their joint venture, CryptoNexa, and social media posts in Dubai.

The investigation further claims that the rumor originated on the site BusinessMole before being amplified by ABC Money, an outlet that Hunterbrook says uses branding similar to ABC News to mislead readers.

What Else: Beyond the volatility of the hoax, the stock remains pressured by disappointing third-quarter earnings reported last week. Revenue of $508.15 million and adjusted earnings of 32 cents per share both missed Wall Street estimates.

In response, analysts at BMO Capital and Stephens lowered their price targets to $54 and $49, respectively.

Benzinga Edge Rankings: Underscoring these fundamental challenges, Benzinga Edge rankings currently reflect the stock’s weakness with a Growth score of just 12.91 and a Value score of 21.06.

PZZA Price Action: Papa John’s International shares were down 3.53% during regular trading and up 0.10% in after-hours trading on Wednesday, last trading at $40.79, according to Benzinga Pro data.

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How To Buy PZZA Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Papa John’s International’s case, it is in the Consumer Discretionary sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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