By Salvador Rodriguez
10:40 AM PST, January 17, 2014
It looks like Nest wasn't the only beneficiary of its $3.2-billion acquisition by Google -- a penny stock of a similar name has also made significant gains as a result.
Nestor, a Rhode Island company, saw its stock price jump as much as 1,900% this week after investors confused it with Nest, the smart appliances company that was purchased by Google.
Unlike Nest, which sells smart thermostats and smart smoke detectors, Nestor sells automated traffic enforcement systems to governments, but investors were easily confused because of the company's ticker symbol, which happens to be NEST.
Though investors thought they were buying into the next great tech company, they were actually buying stock in a totally unrelated business.
Prior to Google's $3.2-billion deal, Nestor was trading for less than a penny. After the Silicon Valley acquisition, Nestor's stock price jumped to as much as $0.10. Currently, Nestor is back down to $0.03.
As zany as Nestor's situation was, this isn't the first time something like this happens.
Last year, a company called Tweeter Home Entertainment saw its stock price increase 685% after Twitter announced its plans for an initial public offering. Confused investors bought TWTRQ stock thinking they were buying stock for the 140-character San Francisco social network.
Copyright © 2014, Los Angeles Times