WE HAVE A CONFLICT OF INTEREST, HOUSTON!
Come on, be honest: how often do you check the disclaimer on hot stock sites?
Or, should I ask "have you ever checked out the disclaimers"? I didn't at first when I started playing the pennies and subbers. Then one day, I took the time to read the micro-print on the disclaimer page. That was a wake-up call to take these "hot stock picks" with a skeptical eye.
Here's what one says on its disclaimer page. I've bolded the interesting parts:
8. IPOmovers.com and/or Taylor Capitol Incorporated has been compensated by companies profiled or mentioned on this site, or by a third party. We disclose any and all compensation received from companies profiled or mentioned on our site in accordance with section 17(b) of the Securities Act of 1933. IPOmovers.com and/or Taylor Capitol Incorporated may have been compensated in a combination of cash and stock to provide the subject company with certain financial public relations services, including preparation of this report. Such compensation, at the time of engagement, was valued at less than $250,000. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the subject company.
Well, at least they're honest, right? Yeah, because the SEC requires them to disclose that little bit of information. The part that cracks me up is that they have to admit that this compensation is a conflict of interest and it could affect their ability to remain objective! Bwa ha ha ha ha ha! Ok, I fell better.
It gets worse. Read some of the other sites' disclaimers, and you'll see that not only did they get oodles of shares to "profile" a particular company, but that they reserve the right to sell at any time without advance notice. You ask, so what? Good question.
Let's say a fictitious stock picker site gets 500,000 shares of a sub-penny stock to list it on their site. They then showcase it and also send out an email to their subscribers, telling them what a wonderful opportunity this is to double or triple their money. This then gets chatted up by almost all of the message boards out there, and the buying frenzy begins. The PPS moves up and people take notice, buying more and more. Hey, it's gone up 75% in the last week! Life is good!
What they don't know is that the stock picker site has been selling off their shares into the price rise, making a killing. After a while, the bubble bursts and the damn thing tanks. Why did this happen? Wasn't it a good stock, after all? No, it wasn't Billy. It moved up purely on speculation by greedy buyers who got conned. But didn't it have potential? The CEO said this and that, and it really sounded good.
Time for a reality check, Billy.
ABOVE ALL, DON'T MAKE BUYING DECISIONS BASED ON MESSAGES ON A CHAT FORUM. Do your own "due diligence" and research the company.
Good luck trading!
Or, should I ask "have you ever checked out the disclaimers"? I didn't at first when I started playing the pennies and subbers. Then one day, I took the time to read the micro-print on the disclaimer page. That was a wake-up call to take these "hot stock picks" with a skeptical eye.
Here's what one says on its disclaimer page. I've bolded the interesting parts:
8. IPOmovers.com and/or Taylor Capitol Incorporated has been compensated by companies profiled or mentioned on this site, or by a third party. We disclose any and all compensation received from companies profiled or mentioned on our site in accordance with section 17(b) of the Securities Act of 1933. IPOmovers.com and/or Taylor Capitol Incorporated may have been compensated in a combination of cash and stock to provide the subject company with certain financial public relations services, including preparation of this report. Such compensation, at the time of engagement, was valued at less than $250,000. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the subject company.
Well, at least they're honest, right? Yeah, because the SEC requires them to disclose that little bit of information. The part that cracks me up is that they have to admit that this compensation is a conflict of interest and it could affect their ability to remain objective! Bwa ha ha ha ha ha! Ok, I fell better.
It gets worse. Read some of the other sites' disclaimers, and you'll see that not only did they get oodles of shares to "profile" a particular company, but that they reserve the right to sell at any time without advance notice. You ask, so what? Good question.
Let's say a fictitious stock picker site gets 500,000 shares of a sub-penny stock to list it on their site. They then showcase it and also send out an email to their subscribers, telling them what a wonderful opportunity this is to double or triple their money. This then gets chatted up by almost all of the message boards out there, and the buying frenzy begins. The PPS moves up and people take notice, buying more and more. Hey, it's gone up 75% in the last week! Life is good!
What they don't know is that the stock picker site has been selling off their shares into the price rise, making a killing. After a while, the bubble bursts and the damn thing tanks. Why did this happen? Wasn't it a good stock, after all? No, it wasn't Billy. It moved up purely on speculation by greedy buyers who got conned. But didn't it have potential? The CEO said this and that, and it really sounded good.
Time for a reality check, Billy.
- first, the CEO can say almost ANYTHING if he/she uses the standard weasel words. The SEC terms this "forward looking statements". "We anticipate", "we hope", we project", yada, yada, yada. ALWAYS look for the weasel words in the press releases!
- do you really think that a company with no revenues, no products on line yet, will actually compete in the market sector with the big boys?
ABOVE ALL, DON'T MAKE BUYING DECISIONS BASED ON MESSAGES ON A CHAT FORUM. Do your own "due diligence" and research the company.
Good luck trading!
posted by Bob | 7:25 AM
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