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Pumps & Dumps 101
Twelve Indisputable Facts About Promoted Stocks


We regularly get questions about the integrity of stock promotions from the novices that promoters and dumpers rely on in order to be successful in their evil intentions. Here are some absolute facts about penny stocks that should have anybody new to this game run screaming into the night.
1. Promoters do not issue "picks" because they do not pick stocks for pumping. Promoters are paid to pump stocks and will "pick" the ticker they are paid to pump. This is particularly evidenced when several promoters "pick" the same ticker.
2. No promoter ever did any "research" on any of his picks.
3. Promotions take place strictly for the purpose of increasing trading volume so that somebody--be it officers, directors, financiers, promoter or a retail investor with a lot of stock--can sell their shares.
4. A press release that is issued concurrent with a promotion is a sure sign that the company is in on the Pump & Dump, ESPECIALLY if it is released just after the announcement of the "pick".
5. A Pump & Dump subject that is late with its financials has had its promotion timed to launch prior to the filing of bad news--usually poor financials and often a significant increase in the number of shares outstanding. This is also true for promotions that launch right before quarterly filings are due.
6. Companies often lie about their involvement or knowledge of a Pump & Dump campaign, sometimes in a press release
7. Charting--including legitimate services like Barchart.com--cannot EVER apply to promoted stocks, because they are manipulated. A promoter who bases his "pick" on claims of charting is just using this particular marketing ploy to promote and create interest in the stock. Similarly, there is no such thing as "technical analysis" on a manipulated stock.
8. The majority of cheerleaders on social media--Twitter, Facebook, message boards like InvestorsHub--are supporting the cause of those who want to dispose of stock. The more a person posts, the more likely they are involved.
9. Shorting never cause a promoted stock to drop in share price. Claims of shorting are popularly cried from those who dumped stock in an attempt to veil their activities.
10. Promoters often collude to hijack a dormant ticker for their own benefit.
11. All promoted stocks will eventually head towards zero. Yes, all of them.
12. If the SEC suspends trading, the whole thing is a scam. The SEC does not suspend without reason.