STAGES FOR THE
DEADLY ART OF STOCK
MANIPULATION
The Pump & Dump Scheme
Stage 1: The Acquisition of shares.
Please note: all sharp price movements, whether
up or down, are the result of one or more, usually a
group, professionals manipulating the share price.
(Loading): In stage I of a Pump & Dump scheme
Manipulators after acquiring their shares leak
information and pump the stock to get buyers
silently. This leads to front loading also.
Stage 2: The Promotional Campaign!
Note: this is designed to spread a rumor/story
and to play on the emotional greed of a pie in the
sky find. It begins to spread across the financial
world. Joe public rushes in not to miss the next
gold rush.
(PUMP/Greed) Newsletter writers are hired --
either secretly or not -- to cheerlead a stock. PR
firms are hired and let loose upon an unsuspecting
public. Contracts to appear on radio talk shows are
signed and implemented. An advertising campaign
is rolled out (television ads, newspaper ads, card
deck mailings, e-mails, etc.).
The company signs up to exhibit at "investment
conferences" and "shows" (mainly so they can get
a little "podium time" to hype their stock and tell
you how "their company is really different" and "not
a stock promotion.") Funny little "hype" messages
are posted on Internet newsgroups. BTW the
more, the merrier. 1000% returns are projected.
Stage 3: The infamous DUMP!
(DUMP) The once low volume that caused a bit of
a spike suddenly changes to big volume. The
stock manipulators sell out their positions into the
new buying brought on by the promotion
campaign.
Stage 4: The Silence or News Vacuum!
(Silence) No more news or insider leaks of
information to pump the stock to get buyers. The
front loading sells out. The silence plays on the
emotional fear of being hoodwinked. Negative
opinions begin to spread across the financial
world. Joe public sells out to cut their losses. The
really slick market manipulators would even seed
the Internet news groups or other journalists to
plant negative stories about that company. Or start
a propaganda campaign of negative rumors on all
available communication vessels.
Stage 5: The Distortion!
(Gone/Waiting/Shorting):
Stage 6: The Accumulation!
(Gone/Waiting/Buying): If the manipulator sees
an opportunity the stock is on the floor and not
part of the Short & Distort campaign they will begin
buying back and slowly accumulating. As the
Shorters were shorting the first manipulator was
selling, so now it goes the other way. Buying to
put pressure on the shorter to cover. Accumulation
by new investors and averaging down of old
investors are leads to the pressure on the short.
Gruß Dr. Broemme
DEADLY ART OF STOCK
MANIPULATION
The Pump & Dump Scheme
Stage 1: The Acquisition of shares.
Please note: all sharp price movements, whether
up or down, are the result of one or more, usually a
group, professionals manipulating the share price.
(Loading): In stage I of a Pump & Dump scheme
Manipulators after acquiring their shares leak
information and pump the stock to get buyers
silently. This leads to front loading also.
Stage 2: The Promotional Campaign!
Note: this is designed to spread a rumor/story
and to play on the emotional greed of a pie in the
sky find. It begins to spread across the financial
world. Joe public rushes in not to miss the next
gold rush.
(PUMP/Greed) Newsletter writers are hired --
either secretly or not -- to cheerlead a stock. PR
firms are hired and let loose upon an unsuspecting
public. Contracts to appear on radio talk shows are
signed and implemented. An advertising campaign
is rolled out (television ads, newspaper ads, card
deck mailings, e-mails, etc.).
The company signs up to exhibit at "investment
conferences" and "shows" (mainly so they can get
a little "podium time" to hype their stock and tell
you how "their company is really different" and "not
a stock promotion.") Funny little "hype" messages
are posted on Internet newsgroups. BTW the
more, the merrier. 1000% returns are projected.
Stage 3: The infamous DUMP!
(DUMP) The once low volume that caused a bit of
a spike suddenly changes to big volume. The
stock manipulators sell out their positions into the
new buying brought on by the promotion
campaign.
Stage 4: The Silence or News Vacuum!
(Silence) No more news or insider leaks of
information to pump the stock to get buyers. The
front loading sells out. The silence plays on the
emotional fear of being hoodwinked. Negative
opinions begin to spread across the financial
world. Joe public sells out to cut their losses. The
really slick market manipulators would even seed
the Internet news groups or other journalists to
plant negative stories about that company. Or start
a propaganda campaign of negative rumors on all
available communication vessels.
Stage 5: The Distortion!
(Gone/Waiting/Shorting):
Stage 6: The Accumulation!
(Gone/Waiting/Buying): If the manipulator sees
an opportunity the stock is on the floor and not
part of the Short & Distort campaign they will begin
buying back and slowly accumulating. As the
Shorters were shorting the first manipulator was
selling, so now it goes the other way. Buying to
put pressure on the shorter to cover. Accumulation
by new investors and averaging down of old
investors are leads to the pressure on the short.
Gruß Dr. Broemme
