I personally think anyone putting more than $500 into a single penny stock is insane, unless the company has flawless records. Out of all the plays I've done I've only really won on two or three of them. Huge risk for huge upside, but a lot of the time you hear about them through pumpers. You may not realize they're pumpers or accept it, but they are. And as soon as you buy in, what happens. Dilution starts, sell offs happen, etc.
I can't count how many penny stocks I did decent DD on that have lost 99% of their value within a month. And it's because the way I came across them were from people I trusted who ended up being pumpers. Even some I didn't get through them ended up losing all my money to dilution mixed with me thinking it's just people panic selling and that we will be back. That leads to holding longer than you should and on penny stocks, such a little price change is required to see significant % differences.
CMGO is not a pump and dump though, it's a lawsuit play. It should not be treated like any other penny stock. The money to be made here is not based on company success but rather this lawsuit.
Short answer, yes $10k is WAY too much. Even 1/4 of that is way too much. Go put that into a safer play like marijuana stocks or something.
I put $100 into CMGO and it's worth around $600 right now, and only going up from here. I'm ok with those numbers. I wouldn't be ok with losing a crapton of money if the lawsuit ended up not being what was speculated. With penny stocks, the gains are big but the losses are big too. What you have to remember is that manipulation exists way more with penny stocks than standard stocks, and more often than not market makers will leave you broke. Sometimes companies just start diluting to help pay off debt as soon as stocks reach a certain level and you can't predict that. Truly is the wild west.
