I learned a hard lesson today, and fortunately it wasn't that bad.

I invested a few thousand dollars in a penny stock carelessly (via ETRADE, with the intention of doing a short term trade, or a day trade if it proved worth it), without doing my research, and within a few hours (after the market closed), was punching myself in the face for being so stupid.

The company is Quantum International Corp (QUAN), and after doing my research I realized they have no product, no employees besides the CEO, and seem to be nothing more than a website asking for investments and promising huge returns. The CEO has a history of founding companies that promised a global name brand and never delivered so much as a brochure. The "news report" that made me buy the stock, passed down along BusinessWire, was nothing more than a fake press release by said CEO.

I know. It was insanely stupid. It will never happen again.

I had heard there were scammers among the OTC stocks, but somehow I didn't believe it.

And now I have this (ridiculous?) paranoid fear that I somehow won't be able to sell my stocks tomorrow morning, that somehow it'll prove impossible and my money will "vanish."

Am I being absurd? Should I be worrying? If I sell in the morning, I've only lost a couple hundred dollars, and learned a valuable lesson. Is there any reason to believe it won't be that simple?

  • For future reference, check out this question and its answers on how to avoid schemes like this. I know you've learned your lesson, but hopefully anyone else who finds this thread will see that thread as well. – John Bensin Jun 12 '13 at 2:21
  • @Aerovistae - I removed my comment, you are right. Not helpful, apologies. – JoeTaxpayer Jun 12 '13 at 20:55
  • @JoeTaxpayer It's no problem, I do that too now and then. Sometimes people say/do such incredibly stupid things it's hard not to shout. Trust me, the things I was saying to myself were far worse. Retrospective self-astonishment, let's call it. – Aerovistae Jun 12 '13 at 21:42
up vote 8 down vote accepted

Am I being absurd?

No.

Should I be worrying?

Yes.

If I sell in the morning, I've only lost a couple hundred dollars, and learned a valuable lesson. Is there any reason to believe it won't be that simple?

If you're lucky, you'll be able to dump your stocks to someone like you who'll be punching himself in the face tomorrow night. If not - you're stuck. You may end up selling them to your broker as worthless.

You might have become a victim of a "pump and dump" fraud. Those are hard to identify in real-time, but after been burned like that myself (for much lesser amounts than you though), I avoid any "penny" stocks that go up for no apparent (and verifiable) reason. In fact, I avoid them altogether.

  • That is a terrifying way to learn a lesson. – Aerovistae Jun 12 '13 at 0:51
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    Never buy anything with quantum in its name. Each era has its own buzz words, and this time it seems to be nano and quantum. :D – Lagerbaer Jun 12 '13 at 2:43
  • Honestly that is valid advice which I had previously independently considered. – Aerovistae Jun 12 '13 at 2:48
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    At least Quantum was a viable hard drive manufacturer, which was bought by Maxtor some time, long ago. – JoeTaxpayer Jun 12 '13 at 3:46
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    Penny stocks in general are at a high risk of both being de-listed and of pump and dump, as well as being very illiquid. Wost case is they become worthless, as they'll eventually fall to their real value of zero. – JAGAnalyst Jun 13 '13 at 17:52

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