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Another Stock Spam Scam

It is not secret to long time readers that I read the messages on various investment forums. I even write a post or two if the time presents itself. I saw something that people might want to be aware of, the simple stock spam.

It goes like this. Someone finds a favorable article about a company and makes a post, with a headline like, “May be worth looking at”. The latest entry found on the yahoo dell message board is for a company called GONT.

Here is an example...

If you read the article in the post, you’ll see a company with a miniscule profit, described as an emerging player in the refurbished computer market. They apparently moved 9,200 units during their latest quarter. The stock has $2.5 million in market capitalization and trades for two cents a share.

Take a stock quote on GONT. That is what it used to be called. It got de-listed and is now on the pink sheets as GONT.OB.

This stock has so little capitalization that a consistent program of pumping the stock might attract enough investors to significantly bump up the price of the stock. Then the pumper sells his shares of the company at a profit. If he’s really greedy, he’ll short the stock and aggressively try and trash the stock under a new internet screen name.

It is a disgusting business that real investors should be on the alert for.

A study of message boards posts pumping stocks shows the most successful course of action when seeing such messages for any period over the past five years would be to short the stock in question. I’m not doing either. There’s not enough upside on a stock trading for two cents a share.

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Shmuel Protter
investmenttool.com

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