Beware of the Basher(Hypester)
The Investing Guys (Investopedia.com)
Whether just starting to invest online or a seasoned online veteran, you've probably seen the message boards and chat rooms that focus on stocks. Many of these boards make rag mags look tame. These sites churn out rumor after rumor, 24 hours a day--some of the more popular boards are getting upwards of 10,000 posts daily.
No technology has changed the financial industry more than the Internet. In the pre-Internet era, there was no way for individual investors from every corner of the globe to meet and talk about the prospects and threats of companies. The free-flow of information has changed the very way we invest. This mass communication, however, does not come without a price. The anonymity of the Internet has also allowed unscrupulous people to deviate and control artificially the price of a stock. We refer to these people as bashers(hypsters).
The Paid Basher/Hypester
This profession may seem fairly simple, but there is a science behind it. Bashers'(Hypesters) intentions usually go further than trying to push down (or up) the price of a stock for their own personal gain. Supposedly, reputable companies and investment firms use bashers in situations such as takeovers. You see, when one company wants to buy another, stock price is king. If a multi-million dollar company's stock changes even by one dollar, the price of the takeover is a difference of millions of dollars. A basher who successfully pushes down the price of a stock can receive a very lucrative compensation. (Just as someone that gets paid to drive the stock price up before selling, pump and dump)
There are three major types of bashers(hypesters): advanced, intermediate and beginner.
An advanced basher(hypester) spreads false or misleading information about a company. They deal in facts to counter--with articles, news reports, and opinion surveys that gave a (positive or) negative impression about the company--every posting from a long investor.
An intermediate basher(hypester) tries to weasel their way into the confidence of longs, and creates doubt using rumor or innuendo.
Finally, a beginner basher(hypster) attempts to create confusion in the chat room by distracting other posters with satire, name-calling, and pointless arguments. The beginner's goal is to make sure no serious discussion of the stock takes place.
Bashers(hypsters) have very professional strategies. First, they develop a character to draw attention, and to build trust from others on the chat board. Bashers are careful never to use profanity or vulgarity because that would cause people to ignore them. Quite often they will respond to posts in a way that ridicules the questioner for asking such a "stupid" question. The purpose is to get a reaction from other posters. The more reaction, the more the room will be disrupted. To throw yet another monkey wrench into the mix, bashers(hypsters) often send in another person to side with the longs(or shorts) of a stock. Again, the idea behind this is to distract people, and to spread rumors and confusion throughout the room.
Bashing( and hyping) is happening everyday. It's important for any investor to realize there are people out there who make a good living at hyping stocks. Participating in a chat forum is both enjoyable and sometimes insightful, but always remember to look at each message with the awareness that its sender may have motives other than being sincere.
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