Unfortunately there are some companies and investors that have a blatant disregard for the law. These companies become involved in what is known as a pump and dump scheme. If you are unfamiliar with the term, a pump and dump scheme is when a company artificially inflates their stock prices by promoting misleading or downright false information about their company. No real value has been added to their business, they just want an easy way to make money. When the price rises, the schemers then sell their shares of the stock for a higher amount. Luckily this practice is seen as stock fraud and is illegal. The knowledge that they are acting illegally and could be heavily fined still fails to deter some people.For more information you can visit buy dumps.
The ‘pump’ part of the schemer’s plan is where they try to ‘pump’ up the value of the stock and push others to buy it. Sometimes it is the actually company pumping their own stock and other times people buy up an inexpensive stock just so they can inflate the price and run away with the profit. The conniving investors that aren’t directly affiliated with the company involved in the pump and dump scheme often target penny stock companies. They don’t need to have the large amount of resources that would be required to buy out a large sum of stocks from a bigger company, and they will be able to create a bigger profit margin.
Whether the pump-and-dumper is a part of the company or someone else buying up the stock, there are a few common methods for the schemers to pump the stock. One way they try to get others to buy the stock is by promoting it on message boards. It’s a free way for them to create awareness about the stock and hope that someone takes the bait.
Since the scammers usually pick penny stock companies with little to no information about themselves on the internet, they can boost the appeal of the stock by creating a false identity for the business online. Those involved in pump and dump schemes have been known to blog or create videos discussing the company’s product- giving it rave reviews, of course. Then when people go to do research about the company on the internet, all they find is this falsified positive feedback.
Another common tactic that pump and dump schemers use to spread the word about their stock is to ask unsuspecting investors to sign up for a free newsletter. Once they’ve got your e-mail address, they’ll send you reports promoting their stock. A real newsletter should have legitimate information or advice on a wide range of companies and be sent out on a regular basis. Another tell-tale sign of someone promoting a pump and dump scheme is a disclaimer on their website or in their e-mails. People who send out these newsletters are now required by law to disclose any affiliation with the company or reveal …