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Last Post: 7/26/2017 10:57:58 PM - Followers: 1 - Board type: Free - Posts Today: 0





                            This board was created for educational purposes to discuss past & present........



         DUMP STOCKS. 


 Here’s how a “pump and dump” scam works. The crooks buy a big chunk of stock in a company,       

often a penny stock where they can get a lot of shares cheap.

They may use several accomplishes so no one person attracts attention with their purchases.

The crooks then start an aggressive campaign of pumping up the stock with stories about what a great business it is and how it is about to make a big announcement. They predict the stock will make huge gains in the next few days.

You are encouraged to buy now while the price is right.

If the crooks have done a good job of pumping the stock, people will start buying it and the price will begin to rise.

As the price starts to rise, the crooks will double their efforts of pumping the stock, pointing out that the price is going up, but there is still time to make a killing.

The crooks keep pumping the stock – even to the point of issuing false press releases or analysts comments to hike the price even higher.

When they feel they have pushed the price as high as it is going to go and company officials are publicly expressing concern about the rising price of their stock, the crooks dump their shares for a fat profit.

This unloading of a large block of stock sends the price plummeting and other shareholders, seeking the price falling, sell also. The stock plunges, sometimes lower than before the crooks took an interest.

The crooks walk away with a fat profit, the shareholders who bought on their advice are burned and the company gets a black mark it probably didn’t deserve.

You can avoid a “pump and dump” scam by:

  • Never buy on the recommendation of someone you don’t know
  • Promises of quick gains are rarely true
  • Big announcements, new products, and so on are a give away that you are being hyped

It is not known, and extremely difficult to determine who the crooks are -- whether it's the company offering the stock, friends of the company, or unrelated criminals just pumping new emerging companies. According to the SEC, it could be any or all of these perpetrators. When the Pump & Dump scams are delivered as email, it's even more difficult to pinpoint because the spams generally do not advertise a web site as do other spam scams. The fraudsters merely broadcast millions of spams... repeatedly, throughout each day, and then carefully watch that stock as it begins to rise.

Pump & Dump Examples:

  >   Carnegie Cooke & Company, Inc. (CGKY)
  >   A Huge PR campaign is expected starting Wednesday
  >   and all next week so grab as much as you
  >   can up to $0.25 range.

They almost always promise some sort of hype like huge PR campaigns, mergers, buy-outs and other buzz-words to trap the investors' attention.

  >   Infinex Ventures Inc. (IFNX) = OTC: IFNX.OB
  >   This One is Strong UP 0.50 (28.57%) Jan 9th Alone
  >   Huge PR Campaign Running for Tuesday Jan 10th
  >   We expect explosive growth thru Friday

All of these were pumped via illegal spam:
  >   POP3 MEDIA CORP Symbol: POPT
  >   Ever-Glory International Group, Inc Symbol: EGLY
  >   HLV Trading, Inc. Symbol: HLVC
  >   Ever-Glory International Group Inc. Symbol: SEGLY
  >   Satellite Newspapers Corp. Symbol: SNWP
  >   Remington Ventures Inc. Symbol: RMVN
  >   Infinex Ventures Inc. Symbol: IFNX
  >   Goldenway Grment Company, Ltd.
  >   (We'll add more later.)

Although the spammers take great care in masking the sender of the scam, our astute spam/scam trackers are often able to pierce the criminal mask. These are just a few of the domains to watch out for:
* Newsletter Weekly Alert
* Trader's Daily Report
* Smart Money Equities
* Tip Top Equities
* (no name)

There were more than thirty of these over the weekend. All were sent from different addresses, supposedly by different people, and most had different subject lines. Here's my SpamCop Stock Scams screen this morning after just 8 hours.


 Beware of 'pump-and-dump' stocks

Six simple tests will protect you from scammers who use phony announcements or endorsements to inflate a stock's price before bailing out.



If you're like me, you probably receive frequent e-mails from people you don't know, but who apparently like you enough to let you in on amazing investment opportunities.

For instance, just recently my new friends sent me tips about:

  • A "renowned" computer maker that was just about to introduce a line of laptops with astounding features that no other company could match.
  • A company about to introduce emergency 911 services for Internet-based (VoIP) long-distance telephone services.
  • A company that just successfully completed testing of a product that allows shipping of Mars M&M candy by UPS instead of by refrigerated truck.

These stories are enticing. With dirt-cheap share prices, we could quit our day jobs if we got lucky and just one of these stocks took off. But, alas, all too often those exciting stories are just that: stories made up to support a "pump-and-dump" scheme.

Bilge pump

In pump-and-dump schemes, promoters gain control of large blocks of shares of a small, probably dormant public company. The promoters 'pump' the stock by issuing copious media releases announcing the firm's entry into a variety of promising businesses.

These announcements become the fodder for phony analyst reports circulated via e-mail and on Web sites in the business of publicizing stocks for a fee, regardless of their fundamental prospects.


The resulting publicity creates demand for shares, giving the promoters an opportunity to dump their holdings. Eventually, the promoters sell out and stop pumping, and the shares again become virtually worthless.

It's not just pump-and-dump schemes that present a problem with the smallest of stocks. There are many cheap stocks around that have good stories to tell, but have little chance of success.

Fortunately, it's easy to spot those risky critters. Here are six checks you can use to quickly rule out dangerous stocks, whether pump-and-dumpers or just bad ideas. You don't need to tabulate the scores. Rule out any stock that fails to meet any single check.

Rule #1: Last price above 50 cents

Most stocks worth your attention trade at $5 or higher. Stocks trading below that level are called "penny stocks," and risk-averse investors wouldn't touch them.

That said, although it's risky territory, there are solid businesses with stocks trading in the $3-to-$4 per share range, and sometimes lower. However, the lower you go in terms of share price, the greater your chances of encountering bad ideas. Once you get down to 50 cents a share, in my experience, the odds are 100% against you.

There's no point in wasting your time researching these stocks. Rule out all stocks trading below 50 cents a share.

Rule #2: Last-quarter sales at least $10 million

Most pump-and-dump stocks have recorded little or no sales. Instead, they've issued voluminous media releases announcing exciting new products and deals to sell those products with distributors around the world. Somehow, those great new products never make it to the marketplace, and the distribution deals never result in significant sales.

Most publicly traded companies with real businesses record annual sales of at least $50 million and usually $100 million or more. You can see a firm's quarterly revenues for the past three years in the Financial Results -- Highlights report (using Citigroup (C, news, msgs) as an example in this case). Avoid companies with recent quarterly sales below $10 million.

Note: many pump-and-dump stocks have never filed financial reports with the Securities and Exchange Commission. Since no data is available, the quarterly revenue figures, as well as other financial data, are not available. These are not real companies. Rule out all such stocks.

Rule #3: Market capitalization at least $50 million.

Market capitalization is the total value of a company (shares outstanding multiplied by the recent share price). Most market experts consider larger companies to be safer investments than smaller ones. Risk-averse investors usually stick with market capitalizations above $1 billion, and most investors rule out stocks with market caps below $200 million or so.

That said, a $50 million minimum should be sufficient for our needs. Rule out stocks with market caps below $50 million.

Rule #4: Institutional ownership at least 15%

Institutions are mutual funds, hedge funds, pension plans and other large investors. Because they are such big players, there is no publicly traded stock that escapes their attention. When a new stock is brought to market, the investment bankers handling the IPO (initial public offering) make presentations touting the stock to all of the institutional buyers they can round up. No matter how small and obscure the company, it should fit some mutual fund or other institutional buyer's game plan. Thus, if institutions don't own a stock, it's because none of them think they can make money doing so.

Institutional ownership is the percentage of a firm's outstanding shares held by the big players, and typically runs in the 30%-to-95% range. Anything below 25% or so is probably a bad idea. However, setting the minimum at 15% is good enough for our needs. Avoid stocks with institutional ownership below 15% (shown in this site's Company Report).

Rule #5: Debt/equity ratio less than 3

Since they incur expenses, but have no income, pump-and-dump stocks tend to carry high debt. The debt-to-equity ratio, which is total debt compared to shareholders equity, is the most widely used debt measure. Firms with no debt would have zero debt/equity, and the higher the ratio, the higher the debt. Usually, companies with ratios above 1.0 are considered high-debt.

For us, setting the maximum at 3.0 should be sufficient to rule out pump-and-dumpers or other dangerous stocks that somehow passed the other tests.

Rule #6 Maximum price/book ratio of 30

Since they typically have little sales, and no earnings or cash flow, the price-to-book ratio (recent share price divided by book value) is the only useful valuation gauge for potential pump-and-dump stocks. Price/book ratios range from below 1 for value-priced stocks to 20 or so for high-growth stocks.

Since they have no significant assets, pump-and-dump and other dangerous stocks will probably have extraordinarily high price/book ratios, so I set the maximum allowable ratio at 30. Avoid stocks with price/book ratios above 30.

These six tests should rule out stocks that have no real businesses. But that's all they do. You will not necessarily make money by simply holding stocks that pass these tests. Finding winning stocks requires more research.

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#2  Sticky Note Penny stocks - The anatomy of a pump $tockfather 05/28/09 12:57:57 PM
#34   legalizemj is a pumper and dumper infunf 07/26/17 10:57:58 PM
#33 dead in here. See where no MrG 04/27/11 12:00:45 AM
#32   NBVG here it comes folks!Buckle up ne trader 12/30/09 08:51:33 PM
#31   Follow the yellow brick pump,follow the yellow brick ne trader 07/16/09 04:23:06 PM
#29   you and me are the only ones posting,my friend. ne trader 07/05/09 09:42:44 AM
#28   I want to see more boards like this ODoyleRules 07/05/09 01:31:17 AM
#27   still posting....mglg,asfx. ne trader 06/12/09 07:58:53 PM
#26   still posting.SPNG ne trader 06/09/09 09:34:34 PM
#25   Well i'm going to continue to post on ne trader 06/08/09 07:39:46 PM
#24   where is everyone,i'm suprised ihub has not shut ne trader 06/07/09 11:41:04 AM
#23   I think this site could be very helpful ne trader 05/31/09 08:49:37 AM
#21   STOCK JOCKEY? LOL! BIG BALLER 05/31/09 02:27:18 AM
#19   Well my pumpers list was Removed By: IH $tockfather 05/30/09 05:16:56 PM
#17   It's like he said in the video...." most $tockfather 05/29/09 04:47:21 PM
#16   Will do:) Need to get this kind of $tockfather 05/29/09 04:31:23 PM
#15   Great stuff! The more kinds of boards like $tockfather 05/29/09 04:24:03 PM
#14   i'm building a new site just for this NickelNothin 05/29/09 03:34:35 PM
#13   keep it updated! I'll search too, i've seen NickelNothin 05/29/09 03:31:26 PM
#12   that is a great video... I too have NickelNothin 05/29/09 03:30:36 PM
#11   SMWF shameless... wow NickelNothin 05/29/09 03:26:12 PM
#10   If anyone out there wants to see some $tockfather 05/29/09 03:11:32 PM
#9   very true! the knowledge of what to look NickelNothin 05/29/09 01:31:53 PM
#8   Yeah I know:) $tockfather 05/29/09 11:01:56 AM
#6   The anatomy of a pump & dump: Kristallweizen 05/29/09 06:04:21 AM
#5   theres already a couple of pump and dump THE GREEN REAPER 05/28/09 11:36:04 PM
#4   Latest victim of a classic PUMP & DUMP $tockfather 05/28/09 02:06:21 PM
#3   Yes your right!!!Their is plenty of $$$$ that $tockfather 05/28/09 01:13:06 PM
#2   Penny stocks - The anatomy of a pump $tockfather 05/28/09 12:57:57 PM
#1   I dunno about only trash under .50 I've NickelNothin 05/28/09 12:21:18 PM