Penny Stock Research Mailbag

| April 17, 2013

mailbagEditor’s Note:  Our hearts and prayers go out to the victims of the Boston Marathon bombing, their families and friends, the great city of Boston, and to peace-loving people everywhere traumatized by this horrific attack.  We wish a speedy recovery to the survivors and great strength to those who have lost loved ones as they begin the healing process.

A Couple Of Questions From Our Readers…

Every day we get a huge number of emails from our readers with great questions about all things penny stock related.  Unfortunately, we just don’t have the resources to respond to all of these emails personally. 

But that doesn’t mean we don’t care. 

In fact, we care deeply that our readers take time out of their busy lives to communicate with us.  And we wish we could answer each and every email. 

We know full well that our readers are the lifeblood of our organization.  Without you, there is no Penny Stock Research.

That’s why I’m going to take some time on a regular basis to answer questions from our readers in special issues entitled, Penny Stock Research Mailbag.  If you have questions about the market, penny stocks, or investing in general, please feel free to send them to us at [email protected].

Question #1:  “Many so called penny stock ‘experts’ hype a stock for a few weeks and then quit “pumping” the equity.  The stock then takes a [prodigious] nosedive to a fraction of a cent after perhaps climbing to almost a dollar.  They imply that they know what they are talking about, but if you read the small print disclaimer at the bottom, they tell you that they are not experts but merely paid ‘shills’ for the company they are promoting!  I assume you do not operate in such a manner.  Am I correct in my assumption?”    –Bill G.

You are absolutely correct in your assumption Bill.  We never have and never will engage in the pump and dump tactics perpetrated by the “many so-called penny stock ‘experts'” you referenced.

All of us at Penny Stock Research strictly adhere to our 100% Unbiased Pledge, which you can find at the bottom of our emails and in the “About” section of our website. 

Here’s our pledge in its entirety:

Employees and owners of Penny Stock Publishing, LLC are expressly forbidden from owning any of the penny stocks that they are recommending to subscribers. Further, no compensation is received from any of the companies recommended in our reports. This ensures you are getting 100% unbiased research on stocks our analysts have come across in their own due diligence.

What’s more, we dedicate a lot of time here at Penny Stock Research to exposing pump and dump schemes. 

Check out our “Pump And Dump Alert” issue published every Friday for info about some of the most popular penny stock pump and dumps of the week.  You can also peruse the Archives on our website for info about hundreds of past pump and dump scams we’ve exposed.

Thanks for your question Bill!

Question #2:  Avery S. recently asked whether REDG and GMEC are pump and dump schemes.  He also asked, “How can one protect themselves from those scumbag promoters?”

I appreciate you bringing these two penny stocks to our attention Avery.  I did some research and found that both Red Giant Entertainment (OTCQB: REDG) and Great China Mania Holdings (OTCQB: GMEC) have been pumped and dumped this year. 

REDG has been pumped by at least 81 promoters with many receiving payments of anywhere between $1,500 and $37,500 for their services. 

The heavy pumping effort drove the stock up 208% from a low of $0.065 in late February to a high of $0.20 in early March.  Then the dumping began, and the stock plunged 96% to a low of $0.009 in early March. 

REDG is now trading for just a penny per share.

GMEC has also been pumped and dumped this year.  At least 110 promoters have pumped GMEC with many receiving payments of anywhere between $1,000 and $200,000 for their services.

As a result of this massive pumping campaign, the stock surged 317% in late January from a low of $0.023 to a high of $0.096.  Then the dumping phase began.  Over the next several weeks, GMEC declined 78% to a low of $0.021. 

The stock is now trading at $0.028 a share.

No question about it, REDG and GMEC are clearly two penny stocks investors would be better off avoiding.

As for your second question Avery…

Unfortunately, there’s no way to 100% protect yourself from pump and dump scams if you invest in penny stocks.  The key is to do extensive due diligence on any penny stock you’re considering for investment. 

In addition to your normal company research, you should also read our Pump And Dump Alert issue published every Friday.  We expose several of the week’s most popular penny stock pump and dumps in that issue.

And if you subscribe to penny stock email services, you should always read the fine print at the bottom of the emails. 

Most services will disclose if they have been paid to promote the penny stock featured in the email.  If they have, there’s a good chance the penny stock is being promoted as part of a pump and dump scheme.

Thanks for your questions Avery!

That’s it for this edition of Penny Stock Research Mailbag.  Remember, if you have questions about the market, penny stocks, or investing in general, you are welcome to send them to us at [email protected].  

Profitably Yours,

Robert Morris

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Category: Penny Stock Tips

About the Author ()

Robert Morris is the editor of Penny Stock All Stars, an investment advisory focused on discovering small-cap and micro-cap stocks that are destined to become the market's next Blue Chips. The Wall Street veteran and small-cap stock specialist is also a regular contributor to Penny Stock Research. Every week, Robert shares his thoughts with our readers on a variety of penny stock-related topics.