Viper Networks Inc (VPER)

[grego68]

nope I didn't miss that...sites like those don't do any advertising or promotion for nothing...they get compensated somehow..Nothing is free

IMPORTANT EDIT: I forgot an important fact to include here! These IR firms were often paid in tradable stock! I think there are regulations these days which have banned this practice, but there are loopholes to it.

Basically this meant that if you were the CEO of penny stock WXYZ and you wanted to hire this IR firm, you would not write them a cheque for $50,000/month, you sent them a bag full of your shares! If you stock was trading at 10c, this firm would get 500,000 free trading shares. This is a win/win for the penny stock and the IR firm (assuming they do their job).

For the penny stock it means you do not have to lay out any cash, you simply hand out stock which costs you nothing (penny stocks are notorious for increasing the authorized shares, ie dilution). For the IR firm it means that they can potentially make a lot more money than if they were simply paid in cash. Having 500,000 shares @10c means that if they could pump the stock up to 20c, they have basically made $50,000 more! This is why they would game the message boards and farm out the promotional activities to other promoters, to try maximize their gains.

Here again we have another potential reason why a stock can suddenly fall for no reason at all. If this IR firm's CEO decided he wanted to buy a new Porsche this weekend, he could simply pick a random clients stock that he was no longer working for and dump all the shares he had in it. He does not care about the potential of the company and where the stock was going in six months from now, he simply wants to cash out.

Very often we would see a penny stock blaming a falling stock price on a promoter or IR firm they had hired in the past that held a large block of stock.

http://www.reddit.com/r/investing/comments/158vi7/i_used_to_be_a_penny_stock_promoter_in_the_late/