Free Penny Stock Picks Can Cost You Thousands.
How do they do it for free? They don't. They're making big
money off of you.
At least
99% of free penny stock picks websites are
making money off of you, hand over fist. They make many
times what legitimate penny stock websites like ours can
ever do. At the same time, they lie, publish misinformation
and pretend to have researched the penny stocks they
pick.
The fact is, they are not researchers, they don't care if
the company is even real.
The dirty secret they don't want you to know?
They
Are Paid To Pick That Stock!
The
truth is one of two things (and you can verify this every
time):
1) Someone paid them to promote the stock,
so they could SELL when telling you to buy!
2) The website owns shares and are
selling, profiting off the rise in price! You are buying
THEIR shares!
Facts:
-They
are not producing real research, they are paid to "pump"
the stock.
-They
are paid in either cash or in shares of stock, or
both.
-While
telling you to buy now, they are selling everything they
can and cashing in.
-If paid
in cash, a large shareholder (possibly an executive) is
selling and cashing out.
-Their
"Disclaimer" (usually hidden) will reveal how much they
were paid.
Why does
this happen?
Simply put, many penny stocks do not trade much volume.
Because of that, any increase in buying will push the price
higher and allow sellers to cash out - at higher prices. It
is worth it for the CEO or other large shareholder to pay a
website $10,000 to pump their stock if it means they can
sell hundreds of thousands of shares at much higher
prices!
We see it time and time again. As long as the promoting
website or newsletter discloses they are being paid, it's
technically legal. But they are skilled at hiding that and
relying on the fact that most people will believe them
without checking.
The newest scam has these same
penny pumpers telling you they are
watching the same promoters and you can profit off of the
move when a promotion starts. They pretend to be traders,
with a free site or penny
stock newsletter, of course. They're there to
help you make money off of those darn pumpers! The fact is,
they are the penny pick pumpers. It's just another lie to get you to
believe they're working for you. Of course they are, your
money!
A great example of a "pump and dump" scam is one we told
our readers about in December and January. North Springs
Resources (NSRS) was a classic.
At the time the campaign started, NSRS had reported a total
of $16 (That's just 16, as in $16.00) in cash on hand and
property worth $59,990. $60,589 was reported in total
assets. And yet, the stock had a market capitalization of
$300 million.
Just before the start of the
penny stock pump, the President, Harry
Lappa filed for numerous stock splits so that he now owned
a total of 500 million shares of NSRS.
The company then filed an 8-K stating they were working on
a deal to acquire mineral rights to a property purported to
have gold deposits. The only claim made at all was that the
property was part of the "prestigious Mineral Ridge Mining
District, Esmeralda County, Nevada". That means nothing. It
could be a parking lot and still be part of that district.
The company hired Carrillo Huettel, LLP as corporate
counsel. The same firm that was ordered by a Federal judge
to hand over its bank records as it was being accused of
stock fraud. Good company, no?
AwesomePennyStocks.com
was paid to promote
the penny stock and
did so through its
affiliates
effectively - as
usual, by PRETENDING
to look like they do
penny stock pick
research, and HIDING
the fact they were
being paid. Hundreds
of emails and
notices sent out to
investors over and
over. Of course,
they never mentioned
any of the news
about the President,
or the Corporate
Counsel, none of
that, just how
exciting the land
acquisition was! Of
course, the company
never intended to
actually buy the
land, just issue
press releases that
it "intended" to. If
you believe that
they really intended
to, I have some
lovely Florida
swampland - no, make
that "lake-front
property" to sell
you.
Now, the biggest scam of all that day
was this: Fake bids being
placed to buy shares of stock. Take a look at the Level II
screen showing the massive bids of over 2.5 million shares
showing. Those are there to keep the sellers thinking
it might be going higher so they stay back while the
President sells all he can. Those huge bids always stay
below other bids so they are never actually buying shares.
It's all a show, a scam.
After more than a decade working on trading floors, I can
tell you one fact: Market-Makers WOULD NEVER show 2,000,000
shares to buy even if they had an order. Never! Showing
your large order would cause the price to rise, making you
and your client have to pay higher prices. That is NEVER
done. What we have here is fake bids being placed hoping to
push the stock higher.
Why? Because they are actually
selling.
Here is a chart of the penny
stock pick pump scheme. As you can see, when
the emails and touting ended, the stock fell off the cliff.
Guess who still owned shares when that happened? Guess who
had already sold all of theirs?
There
are very few penny stock pick websites our these like ours that are not paid to
promote. We provide pure, honest research in small
companies. If you decide to join a
penny stock newsletter or
penny stock website,
please read their disclaimer first! Find out if the are
paid or can be paid, and find out if they own or can own
shares of the stock. If so, STAY AWAY!
Many say they are
not paid - but they
own shares - that is
the SAME as being
paid!
Our only financial interest is in
keeping our subscribers happy so they come back again and
again. Doing it the honest way, our way, means making much
less money. But we can sleep at night.
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