Any good penny stocks I should know about???

 

There are no good ones, look at www.allstocks.com and then go to there message board, you can learn stuff and then see peoples picks

 

I am sure if someone has a truly good penny stock they aren't going to tell you about it.

 

Not necessarily, if I had a penny stock and bought it at .02 and then I told everyone about it they would buy in if they researched and it was truly a good potential penny, and the price would increase, and then I could sell for a profit or hold out and hope it continues to go up

 

Bingo, its a good theory and it can't hurt. Depending on the volume of shares I will sometimes keep a winner to myself.

 

Sounds like Renegade has finally gotten some religion...

Manipulation and or Pump and Dump

The manipulation and or Pump and Dump of companies stocks has grown in number recently mostly because of the Internet. The Internet has provided a vehicle for the communication of stock or company information at very low costs to large numbers of people by just about anyone. Individual investors as well as NASD firms have been arrested for various schemes involving stocks of small and even some large cap stocks. These Pumps and Dumps are done by posting of messages on bulletin boards, issuing false press releases, creating newsletters, and building web sites to hype or de-hype stocks. ( Hype = To raise the expectations for a company and its stock. The Pump and Dumper would be long the stock. ) ( De-Hype = To lessen the expectations for a company and its stock. The Pump and Dumper would be short the stock. )

Another powerful form of manipulation is the analyst reports that upgrade and downgrade stocks of companies. Most all large brokerage houses have research departments that create reports of a supposed independent nature. The independence of all reports should be suspect. The reports can be self fulfilling depending on the audience size and makeup for the report.

Stock manipulators need stock.

They usually get it in one of two ways. One way is to find a "shell" company that already has issued publicly trading securities. This shell company typically has little or no operating history; few assets; few, if any, employees; and slim prospects for financial success. The shell is sometimes merged with a privately-held company.

The other vehicle for these individuals to get stock is to take advantage of exemptions from the federal registration requirements. The securities involved are usually traded in portions of the OTC market where public information is limited and a small number of brokers control the market.

The securities are usually sold through hype or high pressure tactics, often involving "boiler room" operations where a small army of sales personnel cold call potential investors using scripts to induce them to purchase the "house stocks" -- those stocks in which the firm makes a market or has a large inventory.

The information conveyed to investors often is at best exaggerated and at worst completely fabricated. Once they have lured investors, the unscrupulous brokers employ a variety of inappropriate practices, from "bait and switch" tactics, unauthorized trading, "no net sales" policies (where investors are discouraged or actually prevented from selling their stocks) to churning (excessive trading in their accounts in order to generate commissions for the broker). The firm often charges excessive, undisclosed markups and issues arbitrary stock quotations.

The price continues to rise until there are no more investors who will buy, and then the bottom falls out and the price plummets. Sometimes the broker-dealer will buy back the securities at the fallen prices to recapture the stockpile for a future revival of the stock; more often individual investors and traders are simply left holding the over inflated stock.

This same thing can be done by a single investor or a group of investors on the Internet. They will begin buying a stock that preferably has a small float or low number of outstanding shares and is near its price lows. They buy small quantities of the stock over a period of days or even weeks so that the price does not rise or rises very little from its lows. Once the investor or investors have the shares they want they will begin sending newsletters, posting to message boards and posting to chat rooms about the company and its stock. These posts can contain real and or false information. The important thing to understand is that within minutes a group can get the information on a stock to thousands of investors over the Internet. When the information is received by the thousands of investors and traders they will in some cases buy the stock on the merits of the information others will do more research and others will just ignore or delete the information. The key to the Pump and Dumpers is to get some buyers for the stock. Many times a stock will take off like a rocket with the bid and ask heading higher as more and more orders are placed to buy the stock. The Pump and Dumper will in most cases already have their sell orders placed at some price higher than they paid and well below their posted target prices.

As example of how powerful these Internet mediums can be, once in a chat room that focused on news for stocks. A press release was posted to the room and a wrong stock symbol was posted as if it was the company mentioned in the release. The release spoke of some kind of big order from a major company. The stock of the company whose symbol was wrongly posted in the chat room began to see buyers. The stock ran from around $2.00 to over $4.00 in about five minutes. Then someone posted to the chat room that the symbol was wrong and yep the stock price plummeted back to below $2.00 in less than a minute. There were many who made money and many more who had big loses.

Another example would be Comparator Systems Corp.

The ability to artificially inflate the price of a stock, in this instance using the Internet, was showcased in the dramatic rise and fall of the stock of Comparator Systems Corp. The Securities and Exchange Commission brought an action against Comparator and three of its officers and directors, alleging that the defendants sold tens of millions of shares of the company's stock while falsely representing that they owned certain fingerprint technology.

The company's financial statements had been falsified, allowing Comparator to remain listed on the Nasdaq Small Cap Market and avoid classification as a penny stock.

Due to touting on the Internet and Telivision, the company's stock price rose from $0.06 to $1.88 over three days, setting Nasdaq trading volume records. The stock was halted by the SEC and investors lost millions.

Now just imagine if you could tell thousands about a stock. You should be able to get enough buyers for a stock so that the price would go higher. If the news or information was good enough.

Understand that the Internet also offers the independent investor or trader the ability to have conversations both before and after they have bought a stock. These conversations between members of a chat room or message board do not always present a Pump and Dump scheme. They can and probably mostly are just shareholders or interested investors talking about the pros and cons of a stock.

http://www.allstocks.com/pennystocks...ny_stocks.html

 

PistonFan, if you recall when we argued last time, I never said I liked any penny stock, doesnt mean I wont trade em and make some cash.