I agree with you about pumpers. I must admit I promoted some stocks that went sour myself. Take IGTN for example: who would have thought that that healthy company would plan a reverse split. Others that I've been wrong about: ICAN, DDSI, JPHC, MOBL, and many others. So often these penny company CEO's turn on the hand that feeds them. I suspect they do so for personal gain, and even going so far as to colluding with those hurting their stock. Why the heck so many of these companies take the route of dilutive financing is beyond me, but I suspect it's to setup their stock.
IMO these financers who lend out tens of millions of dollars for stock do so to take tens of millions more from the stock market. These financers achieve hundreds of millions in profit by selling virtually an unlimited number of shares. Their share supply is two-fold: through conversion of debt to stock, and through shorting from an offshore account. Many of these financers are offshore in the first place, but I bet those who are not have some offshore connections.
You have to protect yourself in this corrupt market. I say nearly 50% of the stocks are corrupted and serve as nothing but black holes for our money. I suspect the daily dollar volume in these penny markets have been decreasing for the last two years, and for good reason. The scammers have stepped up their activity, and have become more sophisticated.
The way you protect yourself: stop buying on belief, and start buying on results. If a company announces spectacular news, make sure:
-news has a dollar value for the company
-timeline of news is the immediate future
-shares were not registered in the last three months
-company has enough cash to perform the work
-company has POSITIVE cash flow, mostly from operating activity (that is more money coming into the company than going out-check the statement of cash flows)
-company liabilities are low
-history of company is protective of shareholders
-company has paid the stock market back through cash dividends or share buybacks; not attempted or planned, but actually paid the stock market back: see if there are more buys than sells on the tapes after a company announces a buyback
-company has little debt convertible to stock, and the company has been paying off the convertible debt from quarter to quarter
-no substantial litigation against the company (you can't avoid litigation)
-there are no accounting problems
-there is solid undeniable proof of the company's existence (this is of course very important)
AI
