Thanks to some sleight-of-hand, MFG, LLC's newsletters produce more action than any other daily newsletter and the inflated losses to go with it
April 25, 2016: Among the current newsletters that tout worthless penny stocks on a regular basis, it seems that nobody can generate more volume or initial price surge in its subject pump than The Wolf of Penny Stocks and its sister newsletters, Epic Stock Picks, Stock of the Week and United Pennies of America, all of whom are "owned" by a non-existent limited liability company, MFG, LLC. While, The Wolf and company can credit much of the volume in the stocks to an undoubtedly significant subscriber base and Twitter following, what most don't realize is that most of the initial volume at the beginning of the trading session--which fuels the additional interest of followers--is a facade created by trades presumably made by The Wolf himself or his pals. Let's take a look at a sample.
On April 14, 2016 The Wolf pumped the shares of US Highland, Inc (UHLN). At the time, the company was delinquent with its financials, but has since produced them. Off their own numbers, UHLN shares are worth -$.3146 each. Pumping stocks with negative book values (read: bankrupt/insolvent/worthless companies) are not uncommon for pumped penny stocks, especially those touted by The Wolf.
UHLN Daily Trades
The Wolf frontloads
750 trades on UHLN were executed on the 14th resulting in a total volume of 6,201,598 shares. Over the 5 sessions immediately prior to the 14th there were only 64 trades and 607,945 shares of volume. The entire week before that saw no trades at all. This suggests that someone, likely The Wolf himself or his cohorts, was frontloading over the 5 day period before pump. Nonetheless, the inflated volume in the stock generated on the day of the pump is a testament to The Wolf's ability to generate interest.
How The Wolf gets you to believe that everyone wants stock
We receive The Wolf's emails over several different email addresses. His emails never arrive until the market opens and sometimes a few minutes after that. And yet, trading volume is instantaneous. Can you issue a buy order in one second? Even if you have your buy screen already to go, you still have to punch in the symbol and then wait for the order to upload to your broker's computer and then for the trade to actually execute. Then there's the issue of price. Only an idiot issues a buy order at "market". Reasonable traders set a limit price, but the issue with a fast moving stock is knowing where to set that limit. With the instantaneous buying volume, shares are likely to open higher than the previous close. And then there's the competition among buy orders where everyone is dueling other traders for stock. This will also delay the execution of orders unless the limit price has been set high enough to out bid everyone. Most traders end up chasing the stock, or worse get filled after the share price has reached its high for the day. By then, it's too late. Anyone looking to get out will be selling into a dump-a-thon.
UHLN Chart for April 14, 2016
It seems clear to us that The Wolf and his pals or people tipped off to the "pick" have buy orders lined up prior to the open of the trading session to create the appearance of a frenzy of buying in the stock. Since we already know that there is frontloading, it is easy to believe that seed trades have already been entered. We put the integrity of the trading to the test by entering an order to buy 100 shares of UHLN as quickly as we could at $.15, two cents higher than the previous day's close. We did not get filled by the time we killed the order at 9:31 am, even though several trades executed in the .14s over that opening minute and after we entered our order.
The sad result
Having established the $.155 high of the day just 47 seconds into the trading session, UHLN was trading as low as $.138 just one minute later. But then came the orders from those lured by The Wolf's pump, helping to temporarily slow the decline of the share price. Eventually, even those who placed stink bids--offers to buy at prices below recent trades--were "rewarded" with shares, as the perpetrators who paid The Wolf for his time relentlessly hammered out stock and hit every bid that didn't exist just the day before. Eventually, those who were buyers earlier in the day joined in the selling in an attempt to cut losses, thereby accelerating the degradation of the share price.. When the dust settled, UHLN closed down 48% on the day and traders theoretically lost over a quarter of a million dollars.
Not the first, second or last time
The UHLN Pump & Dump is a mirror of other Wolf campaigns. Issuing "alerts" at an accelerated pace in 2016, The Wolf has already promoted 21 tickers, almost every one of which saw similar rises in trading volume and losses. A look at MFG, LLC's Past Performances grid proves up our estimate of $1.9 million in investor losses created by The Wolf's promotions just over the last two months. That number will surely grow in leaps and bounds as the year progresses.
