the OTC .today

July 1, 2011: Today's PUMPs & dumpS

We're now getting emails from a few, mocking us for the rise in GGRI after we called it a Pump & Dump.  Apparently some still don't understand what it is we are reporting.

Stocks that are the subject of a Pump & Dump often go up.  Sometimes a lot.  We once again refer to the case of LEXG, probably the biggest Pump & Dump of the year.  The stock rose from the ashes to trade over $10 per share for a brief period of time.  But predictably, the share price came back down to Earth in short order, once the promotions were complete and the insiders had devoided themselves of their stock.  More recently, the POTG chart drew a similar pattern.

Anybody who doesn't think that there are a lot of victims in these pyramid schemes is a fool.

When we produce our alerts and advisories, we are not saying that the stock will not go up.  What we are saying is that the stock will eventually get clobbered if it does go up.  Some will make money on the P & D campaign.  Most will lose money, often a lot of money.  The only people who are guaranteed to make money are the insiders, who usually keep the printing presses running to replace the certificates that they've just sold off.  They are more concerned with volume than price per share.  While price per share does mean that they will extract more money from the pockets of their dupes, volume translates to the number of suckers out there to take in the insiders' stock.

We do not believe that our alerts and advisories will necessarily stop these schemes, at least not yet,  Once in a while, we do slow them down, as in the cases of SIPC, WRIT, FXIT, AVVC and others.  However, we are still a new service, albeit growing very quickly.  The touters collectively have subscriber bases of several hundreds of thousands.  As a service that is just over three months old, we have less than 7,000 subscribers, although that number.  So when a massive Pump & Dump campaign like the one ongoing with GGRI, where most if not all of the touters are promoting the intrinsically worthless stock, it is a few thousand vs several hundreds of thousands. Thus a successful campaign should not come as a surprise.  However as we continue to print the truth, backed up by evidence, and as people continue to get hurt by these campaigns, we continue to gain more credibility and more subscribers.  Perhaps one day we can make a serious dent into the ill-gotten booty these crooks steal from seniors, widows and orphans.  We hope so.  But for now, we'll be satisified with saving the ones who heed our warnings.  Yes maybe they didn't participate in a scheme where they also could have made money.  But then again, maybe they didn't participate in a scheme where they could have been one of the many injured.

In the case of POTG, many people made thousands of dollars by participating in the Pump & Dump.  However the insiders conservatively made upwards of $10 million - 30 million.   Where do you think that money came from?

To all our Canadian friends, we wish you a Happy Canada Day.  And a Happy 4th of July to our American subscribers.  Be safe, be careful and enjoy the long weekend.