many directors of penny stk ctrs not interested in their business but buy and sell their stk only.bursa shud come out with regulations that those who obtain private placements and paid in shares to takeover their business shud at least keep their shares for a minimum of 6 mths
It will be interesting and a new ball game IF Dtk Lemon were to pickup the baton from Nazif for a 2nd round screw up.Don't be sad, cheer up & life has to gone on. Cut loss and keep hunting.
First, company insiders try to convince outsiders to buy a stock, usually the stock of a small over-the-counter company (Penny stocks). Investors are led to believe that this is a “once-in-a-lifetime” opportunity to make a small fortune. The fraudsters will pump up interest in the stock by sending messages through Internet chat rooms, or posting overly optimistic press releases.
Before the Internet, pump and dumpers used to call people on the telephone (often called Boiler Rooms). The idea is to artificially pump up the price of a stock by spreading false news. The stock price rises because of increased buying and speculation, not because of anything positive happening in the company.
As the stock goes higher, those with inside knowledge are prepared for the “dump.” As more people buy shares of the stock, the insiders sell all their shares for a huge profit. Eventually, the truth comes out, and the stock price falls as more people sell. Guess who is left holding the shares of the now nearly worthless stock? You guessed it – the unsuspecting investors who bought into the hype. They probably thought the price could go higher, so they never sold their shares.
The pump and dump is one of the oldest and most effective scams. Usually, pump and dumps are used on small stocks selling below $1.00 a share because it is easier for pump-and-dumpers to manipulate the stock price with smaller stocks.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
davors
889 posts
Posted by davors > 2012-03-28 10:49 | Report Abuse
rest in peace guyz...
if wanna buy penny stocks.. better choose digista, amedia, cuscapi, granflo etc those valuable stocks...
in goreng stock... people goreng u... :P