The only force that generates interest in any stock is news. If SGMD did not release any news, no one would know they exist. NO ONE here discovered SGMD on their own, someone told you all about it, a HOT tip, and some pumper saying to the moon.
Not ONE person investing in any OTC pumped stocks manage to find that ticker by searching themselves, they are lead to the ticker in some way.
Market makers will only take in shares on the bid, but only if there are people buying the shares on the asked. The only way to get people to buy on the asked is to post news. No news, no shares selling.
News drives the selling of shares. The fact that the dilution is part of the plan to keep the shares on a downward price is to limit anyone other than the company from selling shares.
Here is the easiest way to say this:
- OTC Company sets up a new “hot topic” company
- Quick website added to promote the intent
- News and hot tips emerge and leaked to OTC investors
- Shares sold at a high price at first
- Company says they need money to expand and dilute is part of the success
- Stock price tanks but people keep buying to cost average
- New people are lead to the ticker that it will go back up
- High price share buyers keep buying more to cost average down
- The lower the share price the more people buy
- News keeps interest in the stock allowing market makers to buy and sell
- When people are told, once the dilution stops the stock will explode
- Investors keep buying the stock on the asked, believing that will help
- As the dilution unfolds the 100s of millions traded per day decline rapidly
- The market makers also slow down on buying at the bid
- Company news ends up being proven not so accurate
- All investors who own billions of shares sit and wait
- Investors believe they can tell the CEO what to do to raise the share price
- News continues to slow down and market makers kill the bid and asked
- More people keep buying on the declining price
- When the diluted shares are all sold, the company stops posting news
- No news, no new interest
- No interest, no need for the market makers to have a strong bid
- When the news stops, the market makers stop
- Once that happens its OVER
If there are 3 billion shares are in the float and they did rise to $.02 cent as some speculate. You think a few market makers are going to spend $60,000,000 buying up those shares on the bid?
One-person selling 1000 shares at $.02 and the bid will drop back to $.001. Why everyone believes that if the shares ever did rise back to even $.01 they all will be able to cash in, that is not so.
It would be like someone who sees that eggs are becoming scarce so you go to the store and by them all up to sell higher but they rot before you can get rid of inventory.
You see the point? Pumped OTC stocks are like rotten eggs. At one time you can make a delicious breakfast then soon after they go bad.
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