Stock Spam Messages: SEC study suggests you should follow their bogus advice for profit?


The SEC is cracking down on stock price manipulations where spammers send out millions of email messages implying a stock is going to rise. Presumably the spammers have bought calls on the stock or own shares and then reap benefits if the price goes up from the fake interest created by the bogus emails.

But this raises a darn interesting question. If these manipulations really are working to inflate the price of certain stocks artificially – and they appear to be working – then the best course of action for Joe average investor may be to…wait for it…. BUY those darn spam STOCKS!

Some caveats would obviously apply here – you’d want to make sure you are 1) Not doing anything illegal yourself, so you’d never send out the spams or hype the stock yourself. 2) Buy early in the process before the price spike happens. Heavy internet users probably are the first to get the spam, though you can also check this interesting site, Spamnation, for details about the latest spam scams.

I’m testing this hypothesis without buying anything by following some of the stocks listed at Spamnation. Heres the COB.F chart which suggests the spam may have worked wonders on the price.

However CAU, with less spam and more recent activity, is up only a penny today and appears to have been falling recently, suggesting the spam did not work or didn’t work yet.

If, as the SEC crackdown suggests, stock spam scams are artificially inflating the prices of stocks, it may actually be to your advantage to *follow* the bogus advice even though it’s a bunch of illegal lies and deceptions.

Isn’t that … funny?

About JoeDuck

Internet Travel Guy, Father of 2, small town Oregon life. BS Botany from UW Madison Wisconsin, MS Social Sciences from Southern Oregon. Top interests outside of my family's well being are: Internet Technology, Online Travel, Globalization, China, Table Tennis, Real Estate, The Singularity.
This entry was posted in companies, investments, research, scams, stocks. Bookmark the permalink.

5 Responses to Stock Spam Messages: SEC study suggests you should follow their bogus advice for profit?

  1. Fools Gold says:

    Following any Pump and Dump touter is like picking up pennies in front of a steam roller: its an awful risk for just a few pennies and you should never forget for an instant about that steam roller!

    You can often make money by following the lead of some Naked Shorts too, not just positive-sounding spam. At least buzzards wait till the animal is dead, wall streeters don’t.

  2. The Guardian ran an interesting study on these stocks a month or so ago. They started out worthless and ended up worthless.

  3. M. Xavier says:

    I have been following this with interest and my experience has been that they are worthless.

  4. Jack Payne says:

    I still don’t see why more spammer con men do not get more heavily into chat rooms, bulletin boards, and newsgroups. That’s where the really smart ones are moving.

  5. FoolsGold says:

    Yes, spammers have various touts in chatrooms and various forums on the internet. It is increasing at an alarming rate. Just as these PR-blogs and affiliate marketing sites are becoming a real nuisance.

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