August 1, 2011: Our distaste for touting worthless penny stocks is no secret. In fact it's our raison d'être. The fact that most of these ponzi schemes are somewhat legal is beyond us, but eventually most of these touts will go beyond toeing the proverbial legal line.
Case in point: On July 27, 2011, The self-anointed Stock Psycho at PennyStockAlerts.com disseminated an email to his subscribers pounding the table on CapitalSouth Bancorp. (CAPB).
Good morning everyone.
If you're foaming at the mouth half as much as I am about this new pick, you probably want to get right to it. There's a heatwave, are you sure you don't want to talk about that first?
Okay then, let's get to it!
Today's alert is CAPB - CapitalSouth Bancorp
The entire email can be viewed by clicking here. The excerpt from the email that was designed to whet everybody's appetite:
In the first quarter of 2010, CAPB had a net loss of nearly $47.9 million. In the first quarter of 2011, CAPB had a net income of $289 thousand.
CAPB went from a LOSS of $47.9 million to a net INCOME of $289 thousand!
Talk about a company that's turning it around and seems to be getting healthy. In a down economy for banks they've managed to successfully sell off some of their branches in order to strengthen their capital position in this market.
Then they dropped some brand new news just YESTERDAY...
The problem is that all of this good news belongs to Capiol Bancorp, Ltd. (CBCR) not CapitalSouth Bancorp (CAPB). And no, there is no way to mistake this. Certainly not for a "Penny Psycho" who earns a living offering stock tips. And certainly not when the proper stock symbol is part of the news headline.
CapitalSouth, which delisted in March of 2009, only remains as a public shell, meaning that there are no assets associated with the public company. The stock had been trading sporadically in the penny range for well over a year. Until the Penny Psycho decided it was time to divest himself of his holdings.
On the day of the email, the stock instantly gapped up 2000% to 40 cents, before settling back to close at 11.3 cents on volume of 1.4 million shares, more stock than had traded in the previous year. The Psycho made a pile.
Regrettably, we didn't pay attention to the email until the end of the day, when we usually study the dozens of offerings we receive during the course of the past 24 hours. Had we realized the scam sooner, we would have put out an instant alert. But since the damage was already done, we decided to wait and see what the Stock Psycho would do. And we got the answer. Nothing. We had over four dozen emails from various addresses sent to the Psycho, pointing out the "confusion" in bank names. There was no retraction forthcoming. There was no apology. There was only the next pump (NYXO).
We label the Stock Psycho at PennyStockAlerts.com, its owner IPR Agency, LLC and its publisher Ryan Franks criminals. And we've sent this to the SEC. We strongly urge all hurt by this scam to do so as well.
And this is why you should not pay attention to the touts. We are not painting all of them with the same criminal brush, but we are saying that none of them has your best interests at heart. They are there for their clients, who pay them to pimp their worthless stock. The deck is highly stacked against you.
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