Chainsaw, I've seen this happen before:
To start, stock promoters with a shady background take over a shell company and hype it.
Stock price goes up strongly, getting attention of some innocent person like you, who starts a thread.
The co.-paid hype keeps coming.
Skeptics or shortsellers show up after discovering the stock's run-up and the shady background of the officers, but shareholders 'keep the faith'.
Trading stops with no prior notice, followed by announcement of fraud indictment by a law enforcement agency or the equivalent by an exchange.
Stock never trades again.
The guy who starts the thread feels deep regret.
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I experienced this once, as a long, myself. Here's the story: A few years ago I bought a long-distance reseller called Teletek that had a big run-up in the stock price and a very active online following here on SI. A short seller who is fairly visible on SI (Pluvia) warned about the risk factors of a scam, with a murky corporate governance that left you unsure of who was in charge of the co., and a history of stock fraud by a previous manager. I ignored, just as shareholders of TRBD did. I lost it all. There were shareholder class action lawsuits, but I never got a penny out of them. And the poor guy who started the thread reported getting hateful and threatening email, as if it were all his fault.
After seeing this happen, I learned enough about it to start researching stocks to short. It's amazing, but scams like this happen every year.
One fairly simple-minded way of finding many of them is to set your news service to catch any newswire with the word "Asensio" in it. That's how lots of us discovered Turbodyne. |
