Penny Stock Soldiers (OTC tradeable tickers)/Momentum Plays

[ThePennyDoctor]

Penny Stock Guru has a lot of good material to read - I enjoyed this post about the penny stock promotion calendar; he says the real promos don't start until September 10, which I have observed myself over the years trading the OTC (although I had never pegged such a specific date):


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Way to Win Number Five: Understand the Promoter’s Calendar
There is a season for all things promotional. Think of it as the typical American School Year. I will define this to everyone inside and outside of the country. Also note that nothing ever really passes a major American holiday. Some issues do not pass major Canadian holidays like the Canadian Thanksgiving.

backtoschoolWhat this means is that the money people behind most of these deals take the entire summer off and travel with their family. Some travel and visit others in the business and plan for the busy season, but most simply take time to not really work at all. They do not put their money to work in the Summer at all.

Around the beginning of August they start talking to everyone in the business. The truly big promoters have been acquiring shares of companies they plan to work through the year. They spend hundreds of thousands of dollars getting these shares. Several years earlier most of them use to create companies in reverse mergers. Some made entire operations out of finding empty public shells and putting near nothing companies in those public OTCBB or PINK SHEET shells and proclaiming the next great thing.

A famous group in my own Dallas / Fort Worth area was called the “Shell Creation Group” by the SEC. I remember the day when I met with one of the key people behind that group along with a couple of my partners. Their key guy flew in from Tulsa on his private jet, took a massive limo to some restaurant in Plano, Texas just to meet with three of us. He was sizing us up to see if we would play his game. We failed his test when he realized that we were all over 35, married with children and we would all prefer not to get involved in something that just smacked of BS. That guy is in jail for decades now, and we all learned very quickly that you can be sucked into a huge fall by making a wrong decision. We made the right decision and we all learned all at once how money saves no one when they are involved in a massive conspiracy. Many of those guys went down, and down hard they went. Decades.

Read about that here:
https://www.sec.gov/litigation/litreleases/dec19498.pdf
and here
http://www.sec.gov/litigation/litreleases/2008/lr20645.htm
and here
http://www.siliconinvestor.com/readmsg.aspx?msgid=28171180
… You get the idea.

The replacement for these kinds of frauds is heavy investment in existing companies. Sadly some of these companies do not even realize that these people coming in and generously buying up their convertible debt and creating various funding opportunities for their companies are really setting them up for a massive fall. They are setting them up in ways they have no realization of.

I could relate two stories in detail, but I won’t. I will skim a couple of details. I remember last year meeting with a woman who ran a company after it had been run into the ground following the promotion. She was so smart. She and her husband read books on how to take their private company to the next level and she invited these “Wall Street Guys” to come to her city and visit the company. They came with the limos, the large staff, the thousand dollar suits and put on a great show. She did not realize what they had done to her stock until they started unloading it by the millions of shares and dollars, leaving her and her company with a subpenny stock and nearly no money to do anything. She wanted my advice. I had no advice for her. Her company was real. Her trust killed that real company.

The other one was a bit more funny as an observer. I was being called into do a video on our video site about a particular company. The initial meeting went well. Their stock I had noted had just jumped from barely trading to trading in the millions of shares and dollars. As I mentioned this to him while I was visiting he realized that I was not just some video guy coming in to do a video. He shared how startled he was. I was shown the “technology” which shocked me as being nearly nothing of value. I was worried about even doing a video on this. He could read me on that. After attempting to set up the day to come in and shoot video several times I was asked to just drop it. Clearly they had bigger worries. I was so glad myself to be not doing that video.
Let’s get back to that schedule.

The promo calendar starts about September 10th and runs through about the second week of June in the following year. Yes, that lasts past the end of the school season, but that is only because it is sometimes hard to close out a deal and get rid of all of the shares.

Deals never, ever run through a major US or Canadian holiday. There is generally a break for the Canadian Thankgiving, then the American Thanksgiving, then the ten days up until Christmas. They love to launch campaigns the day after Christmas (sorry Boxing Day Fans – they do violate that Canadian holiday). They love to build interest in the final week of the year and then make that same deal even bigger in January.

In the new year they typically run all of the way through the American Holiday of Memorial Day in late May, however, they slow down fast in June.

Smaller programs happen all of the time and do not necessarily follow such a schedule.