Proof the stock market has gone nuts

"$HAIN to purchase $BDBD for $975M within 1 month" -- Tweet last Friday by Leigh Drogan, founder of Estimize, with a post on his newest website, Mergerize.

In 1841, Scottish journalist Charles Mackay wrote the classic, "Extraordinary Popular Delusions and the Madness of Crowds."

If he were alive today, Mackay would likely have had a field day with the new website, Mergerize, which by its own description, "crowdsources predictions on mergers and acquisitions."

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That post that Hain Foods would buy Boulder Brands within a month was merely one Mergerize member's speculation. It's based on nothing and it's the ultimate in maddening crowds becoming delusional, as we speak.

Created several months ago by the same people who launched Estimize, which crowdsources earnings estimates, the site simply says: "Sign up to contribute your M&A predictions."

And this is just the start: According to a press release by Estimize:

"The way we've built this platform will allow us to scale out into all kinds of other stuff, like IPO expectations, spinoffs, FDA approvals, basically anything associated with a corporate action. Mergers and acquisitions was a natural starting point to bring in the whole world of private and start-up companies. Large public companies, like no time before, are being disrupted at lightning speed by start-ups, and they are increasingly turning to acquisition strategies in order to stem that tide, as well as add to their talent pools. We believe it's important for there to be a transparent set of data around the expectations for these events that can have such a huge impact on a given company or a whole industry."

To which I want to say: We have officially entered the silly season.

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It's one thing to crowdsource earnings estimates, as Estimize so brilliantly does. (Assuming you're into the quarterly meet-and- beat game.) But crowdsourcing speculation on mergers, FDA approvals and other corporate actions?

Speculation on M&A has been around since there has been M&A.

And it has always been dangerous. I learned that in the late 1980s, when I was writing a daily financial column for the San Francisco Chronicle. As part of that column, in the very early days, I would include takeover speculation. There was, after all, so much of it at the time.

Then reality hit: I received a phone call from a guy who had made a ton of cash by selling a Bay Area hamburger restaurant he had owned. He told me he was making bundles following the takeover chatter I was reporting on. (Remember, this was pre-Internet.) I told him that was dangerous. He said he understood. He called back a second time, a few weeks later, saying I had the hottest hand out there, and that he had brought his father-in-law into the fold and they were making bundles. Again, I told him that while I couldn't offer advice, he was playing a dangerous game. It was the third time he called that resonated: He said he wished had listened to me about how dangerous it was. They bet one time too many and lost.

That was all I needed to know before hopping off the merger-speculation bandwagon.

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It's only a matter of time before those crowdsourcing M&A speculation have their day of reckoning, as well.

In the meantime, might as well play the slots. More fun and better odds.

Herb Greenberg is a partner at Pacific Square Research, an independent research firm. Follow him on Twitter @herbgreenberg.