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Signs of a Pump and Dump
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jomini
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01-May-2013 22:17
Yells: "slow down, think, question" |
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nice list. did you come up with it yourself? |
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iluvboost
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01-May-2013 21:53
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11 Signs That You Are A Victim Of A Pump & Dump 1. INCREASED VOLUME AND A TEMPORARY UPSIDE A quietly trading stock has a sudden increase in trading volume following a promotion, which continues even after the increase in share price has been eradicated and the stock falls into negative territory. This is a sign that the insiders had offers at the asking price all the way up and once profit taking started, the insiders continued to sell, this time by hitting the bids.. 2. INCREASED VOLUME AND STRAIGHT DOWN A quietly trading stock has a sudden increase in trading volume following a promotion, but in this case the price went straight down. How could this be if there were no sellers when the stock was quiet? This is a sign that the insiders are dumping, providing stock to bidders no matter what the price. Insiders are probably competing with each other to get rid of stock. 3. INCREASED VOLUME BUT STOCK MOVING SIDEWAYS A quietly trading stock suddenly shows trading volume but the share price is stuck in a tight range. This is a sign that the insiders are not whacking bids but have plenty of stock for sale at the offer. This is the smartest tactic when dumping stock because in this way, unsuspicious investors like the fact that there seems to be support for the stock and yet it hasn't run away giving them the perception that they are not too late to join the party. Always and inevitably, the share price will fall out of bed once the bids stop coming in and the insiders have no choice but to lower their offer. At that point, other investors will also attempt to cut their losses and join the selling. 4. THE TOUT STOPS TOUTING Touts who have been pounding the table for days or weeks, sending email after email suddenly go quiet. This is an indication that they are no longer being paid to tout the stock and have moved on. 5. EVEN WORSE, THE TOUT DISASSOCIATES HIMSELF Touts rely on the insiders to sell in an orderly fashion rather than just dump all of their stock in one load. A stock whose price drops from the word go in spite of the increase in volume looks bad on the tout, who has to be able to show at least a brief increase in share price in order to maintain the confidence of the subscribers he relies on to participate his next pump. If the insiders sell in a rush, no investors make money and the scheme becomes more obvious. In this situation, the tout will often issue an apologetic email to his subscribers feigning ignorance and retracting his recommendation, albeit too late. 6. THE BIG DEAL FALLS THROUGH Pumps and dumps are often executed in conjunction with the concocted announcement of pending merger, acquisition or contract that is in the purportedly in some due diligence stage. The insiders and touts will use this period to continually pump the benefits of the coming transaction, giving a chance for the insiders to divest themselves of their holdings until the inevitable announcement of the failure to consummate the merger, acquisition or contract. 7. THE COMPANY GOES QUIET Following a period of sudden and frequent press releases disseminated in conjunction with a slew of touts promoting the company, news from the company is hard to come by. 8. NOBODY HOME During the promotion of the company, there is a facade of transparency and investors are encouraged to contact the company and even talk to or email the CEO/President. Suddenly, nobody returns phone calls or answers emails. This usually happens at the same time as the company goes quiet. 9. ISSUED AND OUTSTANDING INCREASES DRAMATICALLY If a double digit percentage increase in the number of issued and outstanding shares occurs following a promotion, chances are that the insiders have issued themselves stock to replace the shares they sold into the pump and dump campaign. 10. GOING IN REVERSE Shortly after a campaign of press release and stock promotions, the company will announce a reverse split of its stock. In spite of whatever reasoning is proffered , the real reason to reverse split the stock is eliminate the new shareholders and set up for the next pump and dump campaign. 11. THE SEC COMES A CALLING A temporary or permanent trading halt is ordered by the SEC because of a concern of a lack of accurate or verifiable filings. This is often the result of a heavy and prolonged stock promotion executed in conjunction with grandiose claims and heavy trading volume. These conditions will sometimes, but not always, trigger the interest of the SEC. |
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