Thursday, August 9, 2007

Watching A Penny Stock Spam Scam In Progress

Author: Nick
Category: Money
Topics: , , ,

omg up to 11 cents buy buy buy sell sell sell

My e-mail inbox just got about 50 copies of the following amazing offer:

LIVE FROM THE STREET!

Sym: (X X X X)
Price: .088

Announces the Opening of Two New Stores by
(X X X X) is pleased to announce that Puerto Rico 7, Inc. has opened two new stores. The stores are recorded as Pinero II and Borinquen Towers. Both locations were researched demographically to deliver above average sales due to high traffic streets and communities directly surrounding the stores. The Management team believes that the stores will each quickly reach an annualized run rate of 1.2 Million dollars of sales.

IMAGINE IF YOU HAD THE CHANCE TO BUY A WAL-MART FRANCHISE IN MEXICO RIGHT WHEN IT FIRST OPENED ITS DOORS THERE AND ALL YOU NEEDED WAS A SMALL STAKE TO GET IN.

Hurry, we see this stock starting to make the turn NOW.

I replaced the real stock symbol with XXXX, but if you’re eager to know the company, you can probably just check your own spam folder.

Out of curiosity and boredom, I’ll sometimes check these stocks on Google Finance to see how they’re doing and what news might have spawned the massive e-mailing campaign. Imagine my surprise when I saw this article at the top of the stock’s new ticker: Spam puts Prime Time in focus

The article explains the “news” which these penny stock spammers are using to hype the company: apparently another company it has an interest in just opened two new 7-Elevens in Puerto Rico.

That’s right. You’re going to be a millionaire by buying this stock right now because some other company somewhere opened two 7-Elevens.

The article also reveals how these penny stock spams usually play out: a few gullible investors fall for them and buy up shares, jacking up the price until the spammers end their campaign. But just before sending the last of their hundreds of millions of e-mails, the spammers sell all their shares, typically sending the stock price into freefall. The spammers sell high and walk away millionaires; a bunch of other unlucky folks lose a lot of money.

In case you were thinking of investing in these Mexican Wal-Marts (or Puerto Rican 7-Elevens, or whatever they are), just remember that somebody has to lose this game. Don’t think you can play these spam messages to your advantage either. It’s unlikely that you’ll be able to buy up enough of the stock yourself and sell it in time to avoid the spammers’ own sell-off. So unless you’re one of the spammers who created the game in the first place, you’d be wise not to play unless you want to lose.

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