|
Written by Ben
|
|
Wednesday, 28 May 2008 |
|
A wily manipulator looks for a stock to play. A penny stock, ignored by the general public, with a small free float and no institutional following is a good candidate. Firstly, he will acquire most, if not all, of the free floats of the stock. Then he will play
up the stock by buying and selling his own shares using several
different names. He will spread rumors by posting in all the forums
available to him that the stock has landed or about to land big big
contracts which will make it a super stock. He will say that the stock
will be in great demand and will definitely be “goreng†up to RM2 when
it is being traded at 20c. Because he has cornered all the free floats, he can easily push up the price and create a false market for the stock. When
the stock is boiling with demands, mug punters and especially beginners
rush in to buy and buy. The unscrupulous manipulator then slowly and
quietly unloads his holdings. After he has done that, the stock soon
drops. Everyone scrambles for the exit. The price drops very fast and
before long it goes back to where it comes from. The above tactic is an illegal offence, and may land the manipulator in jail if caught. But that is a different story.
|
