The only OTC's that have any validity and actually are doing what they say, are of no interest to investors. Investors who buy OTC stocks buy on hype and dreams not reality. It's amazing that investors only jump into tickers when they think it will be a huge payday. I have said it before; it's the lotto mentality. Invest a little to win big.
Again the problem is that unlike a lotto drawn number where you have a slight chance to win, the OTC Scheme makes sure no one wins by controlling the winning number and making sure only they own the winning ticket.
If a lotto with only 2 sets of numbers promoted the TOP prize was $100 and tickets were 10 cents, no one would play even though the odds are much better then the current lotto odds. That is because the pay out on the current mega lotto is what dreams are made of. And the entire OTC is made up of just dreams, Broken dreams.
This is exactly the difference between valid OTC and scam OTC tickers, and those running the schemes know full well that the dream will always beat reality. OTC investors don’t have much money, a proven fact and really can’t afford to invest in a blue chip at $50 per share making $2 when it hits $52. To make $1,000,000 that way they need to buy 500,000 shares at $50 ($25,000,000) and PRAY it goes to $52.
The OTC schemes know if they use the same logic only more affordable, they will attract those who want the same. To make $1,000,000 on a scheme with the PR saying if you invest now at the diluted decline of $.0005 per share, all you have to do is buy 10,000,000 shares (Cost $5,000) and when it goes back to $.10 (Cheap from a high of $2) you can make your $1,000,000 investing $5,000 not $25,000,000. But that is rare that OTC investors would even take that $5,000 risk but some do.
In most cases the idea is to spend a few hundred to make at least a huge return but far from $1,000,000. Although some schemes say they will file to go to NASDAQ and then the stock could rise to $3-$8 per share. I have said it before, any OTC can apply and say they applied but are quickly denied by NASDAQ.
That NASDAQ intent news allows schemes to promote the same $1,000,000 number that is what OTC investors want to hear. You cant claim you are a millionaire if you only make $999,000 so the $1,000,000 mark is key to a successful pump because if you make that much you can then say you are a millionaire.
To achieve that, the scheme pump and dump says invest $2,000 at $.01 and when at NASDAQ at $5 you make back $1,000,000. Even $2,000 is a stretch for OTC investors for the fact it may be hard to hide that from the wife. So $100 here, $100 there no one will notice and even if a $100 investment at $.0005 (200,000 shares) even goes back to $.01 is $2,000. Not great but not so bad but rarely ever happens.
The problem is for the fact the schemes make sure the shares never rise so they have no competition from investor’s also selling shares. They want all the money and YOU cant have ANY! Keep in mind brokers have to keep the shares on a declining price to hide the fact they are buying more debt shares from the scheme for much less then the posted bid. This continued decline in price must be done to hide the dilution debt dump.
It’s simple math and how the market is played. If the scheme ticker has brokers selling shares for $.01 with a bid of $.005 and they rely on the retail investors to sell on the bid to fill the asked order, most retailers wont sell that low. Remember OTC investors want a HUGE win not take $100 at $.001 and sell them for $.005 to only make $500 before commissions.
That is why the PUMP PR has to get investors so excited they hold the shares. By holding back shares, brokers would have no option but to raise the bid and the bid can never be greater then the asked. Brokers know if the asked goes UP they will start to lose the majority of investors who want in cheap.
To regulate these OTC schemes, they all play the same game. Sell high on the initial pump then debt dilute. Once the debt dilution dump is in play, they must keep the asked low and the bid low (often they make the bid and asked the same).
NO broker wants to raise the bid and end up with billions of shares they can’t resell. Its like buying 1000 eggs, you may eat some but not all before the rest go rotten and you can’t eat or resell them. This only gives the brokers ONE option, to buy debt shares for far less then the bid and keep selling on the asked at the low price.
If brokers raised the asked from the high demand and did not buy debt shares cheap, they would have to raise the bid and also the asked and end up not getting mass orders on the low asked price. You can tell this happens when you see 100,000,000 shares trade on any given day with no change in the bid or asked.
It’s called a LOCK OUT.
That is when brokers no longer buy on the retail bid and only get the shares from debt sellers for a fraction of the bid. TD takes in about $50,000,000 in fees each quarter selling OTC investors what brokers KNOW will never be allowed to be resold on the lock out because the brokers are all in on the scheme. They may not be breaking the law but they obviously don’t have investor’s best interests in play.
This is about MONEY and nothing else. It’s investor’s dreams to make $1,000,000 cheap. It’s about an OTC scheme knowing that’s what investors want and they create the intent dream scenario that lures investors in. It’s about the brokers making $100’s of millions each year selling locked out shares for commissions and making billion$ selling debt shares to new investors and cost average buyers.
Everyone is in this for one thing, MONEY and nothing else, the investors want easy money and the OTC schemes want easy money as well, and it’s easier to say they may make products and create the company they promoted that never materializes because its easier selling shares on a $400 news release then to actually get out and make the company a reality with the high risk it wont even work as a company.
That is why pumped companies use huge scale plans like marijuana, lithium, gold mines etc. Because they know they will never do it and also that’s what investors want to hear.
Soon all these pumped tickers will change to Mushroom Companies with the news psychedelic mushrooms may be legalized. I Guarantee tickers will change and also guarantee investors will jump in them as well.
There are two losers in this market. The retail investors who in total lose about $100 billion annually and the valid companies on the OTC who are literally “Locked out” by investors the same way those investors are locked out from selling on the bid.
When the few valid OTC companies that break out and become fortune 500 companies, the same investors who declined to invest are now saying they wish they had (Like Amazon at $2.00 per share) because they would have made millions. Shoulda, coulda, woulda! Retail investors are their own worst enemy.
If OTC investors took all their losses over the past ten years and invested in a valid OTC that was on the move that just needed capital to expand, they would have the magic $1,000,000 they so desperately seek that they never find when investing in a diluted pump and dump. They want it FAST not long term, they want it NOW not when they are retired. And they don’t care about validity as long as the stock goes up. But it never does.
OTC investors are the SOLE reason the OTC exists and make scheme runners multi millionaires and the brokers are raking in the CASH like you can’t imagine.
The fact that tickers keep folding while at the same time new tickers emerge keeping the OTC with an average of 12,000 listed tickers on any given day is a cycle that is driven by investors who get in on one ticker, lose then rush to a new ticker that emerges to get in before that one explodes or the belief they will make back all the losses on all the previous lost investments.
The only ones who can shut down these scheme tickers (If the SEC does not change regulations) is the Retail investors who if they all took ONE month off from investing, Brokers would panic losing fees and selling debt shares on the asked they paid very little for and the tickers would fold with no money coming in from shares being sold, they would have to actually MAKE the company work to make revenue or go out and get jobs.
It is much harder to work to make an OTC scheme valid and IMPOSSIBLE to achieve the goals that scheme was planning to do in the pumped news. It is and easier selling just shares while your enjoying your new Ferrari and Lamborghini parked in your garage while on your new 50 foot sport fishing boat at your waterfront property.
Money is the root to all this, money, greed, deception and a lotto dream that investors never want to wake up from. But the reality is, the alarm clock rings, you wake up and go to your daily grind job watching the tickers on your phone every hour and all you see is RED!
Investors also turn on each other trying to convince others to buy the stock so they can get out and make a few bucks (Meaning $100 maybe less) just to get out even break even.
Investors are locked out of selling on the bid, those same investors lock out valid companies due to greed and then the investment community turns on each other with everyone with their finger on the SELL button thinking to themselves they will get out before everyone else.
Try telling that to the last guy on line of 30,000 people rushing to get to a WHO general admission concert.
You will never get in first, and those up-front get stomped on by the rushing crowds. Eventually a few make it to the front at the peril of 1000’s of others.
OTC diluted tickers are the same, 10, 20, 50, 100 billion shares in the float held by millions of investors that all believe they can get out before everyone else while any shares being sold or bought on the bid come from the debt shares not the public bid pool. How can anyone sell if no brokers will buy yours or anyone’s shares? Start your own OTC pump and dump is one way.
If investors STOP and save all that money over 5 years and save $20,000 and go to the casino and plop it down on one hand of black jack. You odds are better at the casino then waiting for your investment to be profitable. I guess also people like the action. One hand of black jack can take only 1 minute to lose your $20,000 or double up to $40,000 while the OTC allows a longer time to hope it pays off, the longer it takes before the scheme is shut down the longer investors can dream.
OTC is like playing black jack but at the $1 table and playing 20,000 hands $1 each. You may win many hands (just not 20,000 of them) you can play longer but when you win you don’t double up your $20,000, you only double up your $1 to $2 but get to play and lose over a longer period of time.
One way to guarantee a win is if you’re a raging alcoholic and you get a free drink with each hand you play for $1 and tip the waitress $1 you get a $10 drink for only $2 that is a sure way to make back some value but what is the cost of liver failure.
It’s the same reason people play lotto each week. If you have $1000 to buy 1000 $1 tickets over the course of a year, your odds are actually better if you save the $1000 and play 1000 numbers once per year not just a few every week. Spending $5 each week decreases your odds then if you bought $1000 one time per year but the reality is, investors know they will lose regardless. The problem buying all 1000 tickets once per year is you would not be able to dream for a whole year till your next $1000 lotto play.
Playing each week means you have 52 weeks to dream, wake up dream wake up. The dream ends up being part of the investors reality as it releases some chemical in their brains and becomes part of the their existence.
The sad part is maybe when they are lucky enough to get out of a ticker and make $100 profit they tell others they WON when they lost on all the others that far exceed the one win. A relative of mine went to the Meadowlands horse races, I said how did you do, she said SHE WON $50! I said really how, she replied on the last race she bet on a long shot a few bucks and won!
I said what about the previous 7 races, she said she bet $10 on race 1 and lost, $20 on race 2 lost, $8 on race 3 and lost, $20 on race 4 lost, $6 on race 5 lost, race 6 $3 and lost, race 7 $18 and lost. BUT amazing she tells everyone she WON at the track. She won $50 but lost $85 in the prior 7 races, I said you know you are still down $35 losing $85 and winning $50, She replied OH!
That is what OTC investors do and you can never ever win buying shares in the schemes with the goal of the investment to rise up to profitability. Investors curse the CEO, they curse the people running the scheme, they even curse out family who said it’s a sure thing.
The only people investors need to curse out can be seen in front of a mirror saying to the reflection “well you did it again you fool”
I hope one day someone at the SEC makes changes to STOP investors who cant stop themselves by regulations and ELIMINATE the DEBT CONVERSION rule that allows unlimited free trading shares to be diluted and generate at least $100,000,000,000 annually from investors who just cant help themselves.
ONE regulation change to STOP the 3(a)10 debt conversion to dilute would shut down all OTC schemes in ONE DAY! But then the same investors would bail on the valid tickers that can make them a good return because its just not enough of a return on your $100 investment and end up in some back ally playing dice. You can stop the markets but investor will always find a new scheme to invest in just for the sake of the risk, gamble and dream. Slot machines, illegal poker rooms, more lotto tickets?
More losses would continue outside of a cleaned up market. I guess if investors want to keep lose money willingly the OTC is the BEST place to do it.
SIGH!
