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ModusLink Global Solutions, Inc. Message Board

  • edgeron edgeron Feb 19, 2003 4:41 PM Flag

    PUMP & DUMP explained... YOU MORONS!!!!

    This is NOT a PUMP & DUMP. Pre-Market buyers got hurt today, because of the SHARP upswing. We held pretty much all day around .95/.96.

    A PUMP, ladies, is when someone leaks (untrue) news, or starts rumours about a possible take-over, or some FAKE news that causes people to bid up a stock.

    When this news hit last night, about 26 minutes after the close of regular trading. It was a SHOCK. Getting $140 million dollars (or 5/6th's of that) was pretty SUBSTANTIAL NEWS. NOT PUMP & DUMP you IDIOTS.

    CMGI was selling off an asset (while maintaining a VESTED INTEREST by accepting the deal including stock in OVERTURE).

    The ANAL(YSTS) DIDN'T have an immediate opinion on how this will affect CMGI, only how it would be dilutive (since they're issuing roughly 3.5 million NEW shares of OVER to CMGI).

    Also, IT gave CMGI around $40 million dollars in CASH, thus ADDING TO THE ASSETS OF CMGI. The "estimated" value of AltaVista was never disclosed by CMGI, but we found out they believed it was worth $140 million dollars. Or about 10 years worth of revenue that AltaVista was generating. (approx. $10 mil per year).

    So this PUMP & DUMP you claim happened today was SO FAR AWAY from a PUMP & DUMP it MAKES ME SICK YOU PEOPLE EVEN EXIST, WHO ARE LAME ASSES that claim to have been taken by the news of the past 24 hours.

    The people who were taken, were the people that were paying over $150 a share for CMGI only 3 short years ago. (I being one of them, only I sold out before March 9th, 2000).

    I happened to buy into CMGI last week at .778, .78, and .805 and I am HAPPY TODAY!!!!!!!!!!!!!!!!!

    A little less happy than I was last night, when we traded at $1.07 though.

    So go STICK IT! Morons.

    -In

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    • A REAL P&D NOT CMGI!

      For those who are unaware of the classic Pump and Dump scam, we thought a quick primer is in order. Don't be surprised if the following scam rings true with some experience that you might have had with a penny stock.

      Phase 1: Preconditions. For purposes of this scam, you need a worthless stock, with a tight float and which is thinly traded. Small or microcap companies are needed as a precondition to this scam. Tight float means that most of the stocks are held by insiders and promoters and not by the general public. The reason for this is that it is much easier to manipulate the price of the stock when there are fewer stocks held by the general public since fewer buying of stock is needed to increase the price.

      Phase 2: The Front Load. The manipulator buys stock of an otherwise worthless stock at low prices. This sets the stage for the manipulator to make money when the stock price elevates.

      Phase 3: Behind the Scenes Promotion. The manipulator will now start a promotional campaign to create interest in the stock. This is done in a number of ways. Promoters use advertising campaigns, cold calls, newsletters, newsgroups, message boards, chat rooms, emails and any other method to promote the stock. The information that they use is usually rumour and not fact. They try to entice the average investor with visions of making the big score, quickly and without much risk. The promoters will tour investor roads shows to drum up excitement. Essentially, the promoter is playing on the investors' strings of greed to try to make the investors feel that he can't miss the next great investment play. With the advent of internet, today's promoter has a larger array of tools at his or her side to mislead the public than years of past.

      Phase 4: The Pump. Promoters now will attempt to inflate the price of a stock. This is acheived in one of two ways or a combination of both. Because the stock is thinly traded, promoters and insiders can quietly raise the price by buying up the stock. In other words, instead of putting bid offers at lower prices, they take the ask bids out and go up the price ladder. Since there is little public float, it doesn't take a lot of buying to get the price up.

      The second method is to get the price up on promotion. With little public float, a little bit of buying will result in the price elevating.

      • 1 Reply to wildride713
      • wildride713,

        Thank you for posting the interesting comments on pump and dump scams.

        So, it seems that the important warning sign is look out for thinly traded stocks with very low average trading volume (100-day period). Thus, enter a thinly traded stock with caution, because you may be the next mark to be rolled in the Wall Street green felt jungle.

        By the looks of CMGI (CMGI Inc.) trading volume, pump and dump schemes could be spotted on this message board and the trading volume would be very difficult to pull off. I generally do not trade a stock that has less than 1 million average trading volume over a 100-day average period.

    • Amen...well said.

 
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