Stock scams
I made a few posts to the newsgroup misc.invest.stocks awhile ago, and I made the mistake of using my real email address. Ever since I’ve been getting the occasional stock scam spam in my email. Here’s how these things work. A person buys lots of shares in a penny stock. He then sends out millions of spam messages advertising it, and as gullible people buy shares, the price goes up. The one who sent out the spam sells at the peak of the stock price and everyone else is left screwed over as the stock plummets back to or below its original trading price. Here are three such scams I’ve received recently.
All of the stock scam emails come in the same format, which leads me to believe it’s all one person. They include a small GIF image that has the actual text of the stock scam, then a lot of dummy text to help get around spam filters (which is moderately successful). This first stock scam came in at 2006-10-19 6:37 from one “Basil Hobson” with an email subject of “at emerge”. It included the following nonsense text:
Crupp had resigned everything appertaining to her office the her, brought her back; - I apprehend, because there was a tendency not what your friends would wish for you, Mister Copperfield, but
is it not a pity that you should devote the spring-time of your No, said Traddles. Sarahs the second. Sarah has something the
Because, said my aunt, its all I have. Because Im ruined, my of wretchedness, torturing myself by putting every conceivable dear blessed baby of a mother of yours, that she was the most
invisible Familiar it would appear, for corporeally speaking she or had the least resemblance to the boyish fancies that we used to
good-humoured acquaintance with her, and had stayed to have a fairy-figure shed some glimpses of her own pure light, that made it disparaging himself, with the old genteel air, will be devoted to
makes a difference. But, my good young friend, whats seventy we all three sat together at a window as the evening gathered in.
phenomenon in youths of his age. I also became once more known to As I knew she would only speak in her own good time, I sat down Then why, my love, said my aunt, looking earnestly at me, why do
mention it, Copperfield, I shouldnt wonder at all. I assure you quite at home. She was to have my bed, and I was to lie in the
lasting friendship, and spoke to us, generally, as became a Voice then started for Highgate. I was not dispirited now. I was not agree with you, the best thing we can do, is, to live the term out
mention that the broker carried off my little round table with the umble powers to express what it is, said Uriah, with a fawning
that airy attire; now I was hungrily picking up the crumbs that ardour and unsettled purpose within me, that all the little good I together on that wonderful performance, and we settled to begin
truth, at that time of my life; for if I should, I must be drawing My aunt, on the other hand, was in a composed frame of mind, which
when it first turned back on the old oak staircase with the great save expense, perhaps you can make up something here for myself. with the flannel petticoat. I have a little ready money; and I
It was advertising the stock “Konigsberg Corp” (KGBC.OB), which it said had a current price of $0.20 but a target price of $1.00, for a 700% profit potential! Who could resist? Well, it’s been two months from then, so let’s see how you would have done if you had bought into this. Note, I’ll be using figures from my own online investing service rather than Yahoo Finance because they have better information, but you have to be a customer to see their stock quotes and research. They have Konigsberg Corp. as simply KGBC rather than KGBC.OB.
For one, the stock scam email wasn’t lying. KGBC was actually trading at $0.20 around the middle of October, like the email claimed. Following the email it peaked to a maximum of about $0.40 in later November, then has fallen to $0.30 since. It certainly didn’t meet the scammer’s “short term price target” of $1.00, but hey, if you had invested, you still would have made close to 50%! Maybe there’s something in these stock scams?
The next stock scam email that wasn’t eaten alive by Gmail’s spam filter came in at 2006-11-21 7:12 from “Sampson F. Nettie” with an email subject of “ginger ale”. I’ll be omitting the random nonsense text accompanying these emails as they really are random nonsense. This message was pimping the stock of “Amerossi EC Inc.” (ARSS) (note that Yahoo Finance has the stock under ARSS.PK; my investing service just has it at ARSS). The message said that the current price was $0.67 and that the projected price was $2.20. That’s a 330% gain! How could you lose?
Well, even a little bit of basic stock research would strongly discourage you from investing. This company was trading as high as $4.00 at the beginning of October, and went into stock free fall after that. The scam letter was sent out towards the end of November, mid-way into the free-fall (at least it didn’t misrepresent the current stock price). ARSS continued its steep decline and is trading at around $0.20 per share right now. Needless to say, had you jumped at the great opportunity to get in for $0.67, you’d have lost a lot of money. Additionally, there was no spike after the spam email was sent out in late November, so it’s likely that the scammers lost a bit of money on this one as well.
The final stock spam email was received at 2006-11-21 12:01 from “Tracey Blanco” with a message subject of “Me again Blanco”. It was trying to get me to buy the stock “Nano Superlattice Technology, Inc.” (NSLT) (listed on Yahoo Finance as NSLT.OB). It listed a current price of $0.16, a short-term target of $0.58, and a long-term target of $5.50! Amazing! If the numbers they seem to have pulled out of thin air are true, you could stand to make some serious money off of this stock. But did their prediction actually come true?
Actually, this is one of those (rare?) instances in which the stock spam appeared to have an effect. The stock was consistently trading at around $0.20 for many months leading up to the end of November, at which point trading volume rocketed into the millions and the price soared up as high as $1.80. That’s quite impressive. The stock price has since settled down to $0.80, but still, if I had paid attention to this email immediately upon receiving it and only sold now, I still would have quadrupled my money. That’s definitely something to keep in mind. It’s important to note, though, that NSLT was trading as high as $4.00 in the beginning of 2006, and went significantly downhill after that, only rebounding towards the end of November when the stock spam was sent out. Coincidence or cause-and-effect? I’m not sure.
So what are my conclusions? You could stand to make a lot of money from this stock spams if you pick up on them immediately and get in at the “ground floor”. You could also lose a lot of money. There’s no hard-and-fast rule on these things. If it’s a decent quality stock and you happen to catch the email just as its sent out, you could make a bit of money. I don’t think I’ll be investing in any of these companies, but I will be keeping my eyes open for future spam emails, and of course, I’ll be reporting about them on here.
