You’ve seen this before…
First the stock surges higher. And the very next day you get an email from some pumper telling you to “get in now, before this stock really skyrockets to new heights!”
They want you to believe there’s a big rally ahead and you need to own this stock now.
But almost always, that very same stock falls back to the levels it was trading at before the paid stock promotion was run.
The job of the pumpers is done.
They’ve driven the share price up and allowed the “third party shareholder” to cash out handsomely. If you didn’t know it, that’s what happens in these scams. A “third party” shareholder is legally allowed to pay a company to promote shares of the stock.
The ugly part is the little guy ends up holding the bag and walks away with no gains to show for their investment. In fact, sometimes investors get caught buying at or near the top and take a loss.
But there’s a much worse scenario out there…
Imagine you just read an email about the next big penny stock. It piques your interest enough to run out and buy some shares. You’re going to “take a chance” and “strike it rich.” Now that you’re in on the stock, you can’t wait for it to make you 200%, 300% or more (like the pumpers promised).
Strangely, your stock starts climbing immediately. The next day you’re up 10%. “Hey, we’re off to a great start here!” You think to yourself, “At this rate, I’ll double my money in a week or two!”
Another day or two goes by and the stock climbs 5% here, 15% there, and before you know it… you’re up 50%.
“Wow”, you think, “This is going so well, I’ll be loaded in no time!” So you let it ride, as a 50% gain isn’t nearly enough to satisfy your greed.
At this point, they’ve got you hook, line, and sinker…
Suddenly, you log onto your account to find the superstar penny stock is down by 15% the next day. This time you say to yourself, “No biggie, we’ve got lots of profit built into the stock. A pullback is inevitable, right?”
So you let it ride…
The next day you log into your account and you’re jaw simply hits the floor. Your super stock is down huge. Now you start to panic. Your palms get sweaty and you blurt out loud, “What the hell is happening here? This was supposed to be a 200% winner.”
You’ve just watched a huge winner turn into a loser overnight!
The worst part is, you searched the internet just yesterday and read some crazy “pump and dump alert” written by this guy Brian Walker. He was warning you all about a paid promotion of your stock.
You ignore the warning, and keep holding the stock thinking “Ok, this’ll turn around. The stock is so cheap right now… everyone will want to buy it.” And the guys who wrote the original emails recommending this stock to begin with are promising you it’ll bounce back.
The very next day you log back into your account again hoping to see green, only to find the stock fell straight off a cliff. And now a small loss (which was a big gain), is now a massive loss.
What do you do next?
You do what far too many people do. You keep holding, and holding, and holding the stock as it sinks into obscurity. Depression sets in and you finally sell the stock for an 80% loss!
Fast forward to right now.
I don’t have a specific person in mind in the example above, but I can guarantee the person I described exists hundreds of times over.
And I can also guarantee it happened to at least one person on this stock…
As you can clearly see, if you’d bought the stock in January and didn’t sell it after the first big pump in February, all your profits were gone by March.
The scary part is, I wrote up this company for the pump and dump being run on it three separate times earlier in the year. I warned you on January 18th, April 18th, and again on April 20th.
Hopefully I kept plenty of folks out of this stock.
Even if a trader sold their shares when I started writing about this pump and dump, they’d still be holding onto quite a bit of money. But if they held on hoping for a turnaround, they made a huge mistake.
QUMI is trading near a pitiful $0.08… down nearly 90% from its high for the year of $0.71.
The really sad part is, the pumpers are at it again on QUMI. And trust me… somehow they’ll convince some poor sucker to buy the stock. “It’s the steal of a lifetime.”
If you see a stock show up in our pump and dump alerts, do yourself a favor and just avoid the symbol altogether. That way, you can save your hard earned cash to invest in real penny stocks with actual revenue and upside potential.
Editor’s Note: If you’re looking to invest in some high potential penny stock companies, let our penny stock pro, Gordon Lewis, show you his secret to picking winning penny stocks…
Until next time,