For millions of irritated computer users, those words mean stock-market spam hitting the e-mail queue. “Act Now!” screams one headline. “Potential to double, triple, quadruple within days!”
Typically, the hypesters tout some over-the-counter microcap stock too small or too risky to be listed on the Nasdaq or another national exchange. The stock price is often less than a buck a share.
So, should you buy? Much stock spam fits the classic “pump and dump” profile, according to the U.S. Securities and Exchange Commission. The spammers send out millions of e-mails, hoping to lure unwary investors into driving the price up. Once prices soar, the spammers sell their shares. Then when the hype dies off, the shares usually plunge and the new investors get the shaft.
Here’s some free advice from the SEC: Do your own research (or consult a legitimate broker) before buying any stock. And always ask: Why would a total stranger send me a stock tip? Good question.
— Chris Tucker