InvestorsHub Logo
Followers 71
Posts 17461
Boards Moderated 0
Alias Born 08/29/2008

Re: None

Tuesday, 01/11/2011 1:10:43 PM

Tuesday, January 11, 2011 1:10:43 PM

Post# of 41474
Tricks some companies use to generate buying interest....We all know HRNF has used buyback hype MANY times in the past, only to dilute billions and billions more shares.

taken from scottrade blog...worth a read, IMO. Bold is my emphasis, for an example of buyback hype some co's use. http://community.scottrade.com/blogs/886/1963
....
.....Another trick involved persons use to generate interest in a pennystock is to place a few small buy orders at a price perhaps twice as high as the typical price of the pennystock, usually a bit after the open. This will create spikes in the stock chart to excite investors, if the volume of the pennystock amounts to something like twenty trades a day. It will also make the pennystock show up in stock screens and % Gainers lists. Announcements of share buybacks can be used as a PR gimmick that may not reflect anything in reality. If the Board of Directors has paid their lawyer in shares, for example, they can settle up with him by buying his shares back, then announce it in a PR. While a very few pennystocks pay a small cash dividend, it is more typical, when a pennystock gives out dividends, for the dividends to be in the form of additional shares of the pennystock. You would have to decide for yourself the value of these dividends, which is mixed. These dividend announcements have a PR value, while they don't cost the Board of Directors anything. Another sort of deceptive yet accurate PR is to announce a routine corporate transaction, like a contract or other agreement with a supplier or customer as a major event, where, because of the size of the pennystock's company, it would be difficult to guess its importance. Announcement of an application for listing the pennystock with AMEX or NASDAQ is another typical PR. It is fair to say that most of these applications have no hope. Patent approvals for pennystock companies involved in some area of research or development are another frequent PR announcement. Remember that a patent only assigns rights of a new design of product or new process to manufacture an existing product, and just about anything can be patented if it hasn't been patented before, regardless of whether it works or is profitable to manufacture and sell.

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.