Stock pumping—often called “pump-and-dump” when paired with selling—is a market manipulation tactic where someone intentionally inflates the price of a stock by spreading hype, misleading information, or exaggerated claims.
Here’s how it typically works:
1. The “Pump”
Someone (an individual, group, or organization) buys a stock—usually a cheap, low-volume one—and then tries to drive up demand by:
• Spreading false or overly optimistic news
• Posting hype on social media, message boards, or newsletters
• Making it seem like “big news is coming”
• Creating artificial excitement through coordinated buying
This pushes the stock price higher because unsuspecting investors jump in.
2. The “Dump”
Once the price rises due to the hype—not real fundamentals—the people who pumped it sell off their shares at the inflated price.
3. The Crash
When the pumping stops and insiders exit, the price collapses, leaving late buyers with losses.
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Key signs of stock pumping
• Unverified “inside info” or rumors
• Sudden spikes in price/volume without real news
• Excessive hype on social media or emails
• Vague claims like “this WILL explode next week!”
• Promoters who don’t disclose their positions
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