THE OTC (PENNY STOCK) MARKET
Pumpers And Bashers
What they do and what role do they play.
Pumpers,Promoters or Company Awareness Professionals.
These terms are used often and whether new to the OTC Markets or a seasoned trader you will see and hear the terms often. Most seasoned traders likely already know the role of the Promoter, For new traders perhaps this will help.
The Penny Stock Market companies not unlike any trading company whether a Big Board Stock or OTC company has to have advertising in some form in order for investors to be aware of the Company, what they do and what the Company may or may not have that makes it inviting as a potential investment or trade opportunity.
In the OTC arena undeniably there are many companies that never intend to do anything other than sale shares of stock, they may have a good story line to tell but in actuality the main plan is to sell stock. On the other hand there are some OTC Companies that are viable with real products trying to make it into the bigger and better trading Listings but success is often few and many fail regardless of the original intent.
Now does that make either of the two bad investments or trade ideas ? In my opinion the answer is no if you are a seasoned trader and possibly no if you are New to the OTC markets because learning to trade is like an investment itself, once you know the game your chances of success increase so the learning process can be costly at first. New traders into the OTC Markets should never discount what the so called bashers have to say many times the information is valuable and can save you money. New traders should never rush into a trade on the hype put forth by pumpers claiming a .05 stock is going to the 1.00 ranges, ulterior motives are always as play on both promoter and basher side.
There is also a Hidden World to The Pumper Side / Many groups of Promoters and Just Stock Players as well Use Skype and other Mediums of Communication similar to skype to coordinate their promotions and or pumps. Using skype allows them to do all the prep work behind the scenes before they go public on message forums to start talking the play up. This is an extremely useful tool for pumper groups that fronload stocks and then hit the message boards to unload on unsuspecting investors
Promoters are required by law to disclose that they are paid to disseminate company information, for Awareness professionals or promoters to call a stock they are working as their “Pick” and lay claim to having found the next best thing is slightly deceiving. One must ask “ Is this Really what the Person Likes or Only Cause he is paid to put it out. You will find most promoters will put out as there “Pick” what they are paid to. Bashers carry no disclosure requirements by law even though some may be paid or otherwise have reasons for discrediting companies.
But in a nutshell the role of the Promoter plays an important part especially now in the age of fast information methods. Without paid for advertising the OTC market stocks could sit idle for months on end without ever offering a trade or chance to recoup any money if you have decided to buy into a particular company.
The downside to that is often toxic financing methods are used to finance these paid for Promotional Campaigns and stock dilution eventually takes a toll leading to reverse splits and or worse cease trading.
The most dangerous type of pumpers you will run across are organized groups that front load into a stock and then just out of the blue you will notice a group of posters show up talking about a hot stock that is already up lets use 200% as an example. This group will hit all avenues of message forums to chat rooms and get the stock to quickly gain even more then they will unload there front loaded shares onto excited investors unaware that this is happening. Now that does not mean that all posters that bring a stock to the table thats up already are in these groups you can tell the difference by the organization of the above mentioned group versus just a singular poster mentioning a stock that seems to be hot . I know these groups are out there I myself have been approached by some to join in but this is not how I play the game.
Then there is this phenomenon that use to really puzzle me but I think I have a handle on it now as I have seen a certain poster over the past nine years repeatedly do this. This poster and Im sure there are others but I will just speak of him will appear on stocks that are normally in the .0001 ranges that are just loaded with bashers really proud of themselves because the stock is about to die and they get to say I told you so.
Well this poster will come up with wild stories of naked shorts, Huge payouts that will come due to the required covering of these short shares etc etc. He will even continue on long after the stock has been revoked and no longer trades. Now seriously for nine years this guy can not be that bad of a trader, he has to serve a purpose so my supposition is that he is there and others like him to keep shareholders at bay from complaining to the SEC long enough for involved parties to disappear , hide assets and otherwise kill time in case of lawsuits or SEC actions that would be taken towards the principals involved. You may think why or how can a stock at .0001 be worth that effort. I know of one .0001 stock the SEC got involved with that the tally was over 252 Million dollars and some individuals were responsible for as much as 54 million of that themselves, there can be much more money involved than you may actually realize in a low priced stock over time.
Company share structure is a Major factor. The larger the share structure the closer the company will be to the eventual reverse split or dilution to the point that it can never really increase in price again. There is much more to say and I will add More at a later time, this should give the basics of why the promoter.
Bashers and why and what is their goal
Bashers the term and you will see this often used.
The role of the Basher is shrouded much more in mystery than the role of the Promoter because he is required to disclose that he is paid to disseminate company information and as mentioned before an almost necessary evil if you will if the OTC markets are to provide a trading arena and as before stated the Basher has no requirement to disclose.
Many suppositions are made like Bashers want cheap shares, Bashers are Paid to take the Company down by the evil Market Makers or shorters. And through my experience I have seen many that just do it as a hobby and lay claim that they are saving New investors from loosing their money giving no forethought to those that are already invested.
There have been cases where Bashers were sued and cases were won But I personally can not say that I know that any are paid. I have seen people Bash a stock until it reaches certain lows then turn around buy in and start pumping the stock. So therin lies the mystery of the Basher, why ?
I have found this question quite plaguing and no definable answer as to paid or not , only that they do exist and they can destroy a company good or bad. Now a battle has waged for at least two decades that I am aware of as to whom does the Most harm, the Basher or the Promoter. That is a question that will likely go on as undecidable and only opinion which is decided by whether you lost money in the OTC market with your time spent or became successful trader and learned how to trade the Penny Market.
I think through my experiences trading the OTC stocks Both Promoters and Bashers can cause you to loose money until you become seasoned enough to know when to buy and when to sell and only on the job training can provide that and as said before it can be costly.
In trying to be fairly unbiased in this presentation I can say that I have more disgust towards people that after a stock has lived its life and has been bashed into oblivion that some Bashers will continue to rub salt into the wounds of those hurt in whatever trade it may be while they try to hope for the best outcome.
Now this type of basher I believe fits into the same category as the last section about pumpers above but they hope to gain by other methods. I do not know the actual story behind this but I know of one very well know basher that I saw make a post one time about offering their services to a company where they had been bashing for some time in response to another posters question posed to the effect that led to that answer but time has failed me to be able to remember the other posters question.
Whether right or wrong about your stock predictions as a Basher or Promoter , move on and let the healing take place. The lessons will be learned and some traders will survive and trade again some will leave the OTC forever. Yes the OTC markets are slimy at times but the fall of ENRON and even more recently many Big Board stocks filing BKz also indicates that dirty tactics are also used there, the OTC market is just more publicized as the Wild West and Scam Avenue of the Stock Market Trading Area.
Whichever side your on you must ask yourself this question.
On the Basher Side did your accomplishment save more people than you hurt ? And are you any better than those you oppose.
On the Promoter side did your accomplishment make people money or cost people money ? That answer is usually seen in the trading activity.
The end result however you perceive this message is / NOT EVERY ONE CAN WIN THERE WILL ALWAYS BE WINNERS AND LOOSERS.