NEW YORK (TheStreet) -- A takeover bid for Avon(AVP) - Get Report last week proved to be a fake, but the boost it gave to the company's stock is lingering nonetheless.

Avon shares closed at $7.18 on Monday, about 8% higher than its close of $6.67 on May 13, the day before the bid of $18.75 a share from a nonexistent British private-equity firm called PTG Capital was outlined in a filing with the Securities and Exchange Commission.

"Even though the offer was totally bogus, when these things happen -- whether the offers are real or not real, credible or not credible -- stocks often stay elevated for a period of time," said Linda Bolton Weiser, an equity analyst with B. Riley & Co. 

"It's just that the offer itself highlights that a stock may be undervalued," she added. "It's up for debate whether it is or not."

Even with the gain, Avon shares are still down about 49% over the past 12 months, largely based on concerns over shrinking sales, potential debt covenant violations and the possibility of a higher tax rate.

The fake bid highlighted a lack of vetting in the SEC's filing process, which is largely automated and punishes those who abuse it rather than investing heavily in prevention. The SEC said it's reviewing the incident, and The Wall Street Journalhas reported the FBI is looking into it as well.

The FBI would not immediately comment on Monday.

What investors find troubling about the false bid is that the very agency charged with protecting them was used to commit a fraud. Even though faked takeover bids have pushed up prices before, for companies ranging fro airlines to department stores, investors don't expect the same risk when a document has passed through the SEC, Weiser said.

"If I saw the SEC filing, why on earth would I not believe it was not initially true?" Weiser said. "It's up to the regulatory authorities to look into it."

Another reason that Avon may not have given up all of last Thursday's gains is that it has been generating cash flow to service its debt, which was a major concern, Weiser said. Other concerns for investors have included a forecast for a higher tax rate on the first-quarter earnings call and exposure to foreign-exchange risk.

"People are questioning if they are bumping up to debt covenants, but the company is free-cash-flow positive," Weiser said. B. Riley & Co. maintains a neutral position for Avon, with a price target of $6.50.

Avon, based in New York, still has a long way to go to quell long-term investor concerns, especially given the steady decline of its active representative base, which is a key indicator of the health of the Avon's direct-sales model, according to Erin Lash, an analyst at Morningstar.

"There's been multiple attempts to fix the business throughout the years, but Avon has been unable to land on stable ground," she said. "This is reflected in the continued erosion in its active representative base."

There has been speculation that Avon is exploring exploring strategic alternatives that include selling at least part of the company to private equity firms, Lash added. 

In light of Avon's track record of declining takeover offers, the company seems more likely to sell portions of its business rather than the entire company, according to Lash. For instance, there has been speculation this year as to whether the company will hold on to its North Americn business.