Stock Spam Getting Too Crowded: Latest Trick Is Advertising Your Stock In Respected Financial Publications

from the competition-is-getting-tough dept

Stock spam has become even more popular over the last year or so, as there's increasing evidence that it works for the spammers as an easy way to get money. However, with so much spam, it appears that some need to figure out other ways to pump up their stock -- and may be using ads in respected financial publications to do so. Davis Freeberg writes "Normally, if I received a piece of stock spam, I'd just delete the message and move on, but last week I got a piece of stock spam in my mailbox instead of my inbox. The company in the letter was named Ghuangzhou Global Telecom. They recently went public in a reverse merger. Through the use of complex financial engineering, the company's founder, has gone from an initial $100 investment to $7.6 million, based upon Friday's closing price. What makes this story so surreal is how Ghuangzhou is getting their publicity. Instead of sending out mass email spams, they are targeting financial people with mailers and have been advertising in Business Week, Forbes and Investor Business Daily. Kiplinger's appears to be the only major publication to reject the ads, and has already spoken out about the ads -- but the rest of the mainstream media seems to content to ignore the issue, as long as they are getting ad revenue from the promoters." Freeberg also takes a closer look at the company. It does seem problematic that respected financial publications seem to be giving the tacit okay to a questionable stock. Also, not mentioned in the article, but it certainly sounds like these ads may violate SEC rules for promoting a stock.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    John, 12 Jun 2007 @ 7:25am

    I read

    I read a study recently that tracked such spammed stocks; in a great majority of cases, the stock ends up being worthless and you end up losing all of your money...big surprise eh?!

    reply to this | link to this | view in chronology ]

  • identicon
    ehrichweiss, 12 Jun 2007 @ 8:15am

    one way

    One way to fix this would be to freeze all trading on stock that is being spammed for a given length of time seeing as how it surely enters into the realm of securities fraud BUT I don't see it happening since someone will get the idea to spam legit stock so they could cash in.

    That being said, if a stock is being spammed then it should at least be given as an alert to all traders(especially day traders) to warn that the stock could be worthless.

    reply to this | link to this | view in chronology ]

  • identicon
    William, 12 Jun 2007 @ 8:45am

    Commercials

    This reminds me of the commercials for stock in sketchers Shoes I saw a few months ago. They said "I like the shoes so I bought stock in the company".

    It was very weird seeing a commercial for shoe stocks. But it couldn't be a pump and dump because presumably the company paid for the commercials. Weird.

    reply to this | link to this | view in chronology ]

  • identicon
    DML, 12 Jun 2007 @ 9:30am

    What's funny is that these guy are not "respected"

    And yet Forbes, Business Week, et. al. routinely interview CEOs who lie to the American public about how influential their companies are or how great they're performing.

    If you want to see more examples of over hyped stocks and dubious claims of influence, don't stop at Ghuangzhou - just take a look down the S&P 500 and pick one.

    reply to this | link to this | view in chronology ]

  • identicon
    Jezsik, 12 Jun 2007 @ 9:37am

    Why doesn't the market forces balance this out?

    I am obviously not an investor, but it seems to me if I saw a stock being pumped this way, I'd short sell the stock as the price climbed and rake in the bucks when it tanked.

    reply to this | link to this | view in chronology ]

  • identicon
    Stock Spam, 9 Aug 2007 @ 9:11am

    Stock Spam

    Always check the stock spam report before investing in any public company stock symbol.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown for basic formatting. (HTML is not supported.)
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown for basic formatting. (HTML is not supported.)
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.