Penny Stock Pump ‘n’ Dump meets the Internet Age
May 10, 2009
The New York Times had an interesting, albeit sparce (on the good side, it’s short!) article by Floyd Norris, probably their strongest business reporter, about how some small stocks seem to be the object of manipulation by culprits unknown hiding behind internet pseudonyms, creating apparent momentum in its stock price and real profits for those who have access to the stocks at low prices, either via being shareholders while the pump is being primed, or a finance bigwig with access to special discounted share purchase agreements.
Check out the article. I promise, it’s short.
Nothing too mind-blowing takes place as much of it I think most investors already assumed takes place regularly, but it does make me glad I don’t base any investing on share price movements I can’t explain (which is why I am a bystander for this recent rally in financial stocks). And it makes me more wary of the convincing arguments that can be made by charts alone.
… and the cow goes moo
