Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Canary...Penny Stocks?

beebee
edited March 2021 in Other Investing
First, fraudsters load up on ultracheap shares of a small stock hardly anyone trades. Then comes the pump: They pitch the stock as one with hot prospects, spreading around positive information to push up its price. Finally, there’s the dump: After the price jumps higher, the perpetrator sells and leaves the new buyers holding a mostly empty bag.

“It’s all just a pool filled with sharks,” said Urska Velikonja, a law professor who studies securities regulation at Georgetown University Law Center. “It’s where the unwary go to get eaten.”

Penny stock booms tend to occur during raging bull markets, when greed abounds. They were hot in the 1980s, when the arrival of cheap, long-distance telephone service gave rise to brokerage firms that specialized in high-pressure, cold-call pitches of worthless stocks.
image

penny-stock-trading-volume-has-exploded-by-2000-amid-the-growing-influence-of-retail-traders

Comments

  • edited March 2021
    Remind me of that fraudster Dario, trying to fake out US-T and bond market so prices could be lowered so he can come in and sweep it.

    HOPE investors do not fall for these trickery and keep their heads/mind forward
Sign In or Register to comment.