0

Sometimes I see penny stocks on the Yahoo! Finance page move by about 100% in a single day.

For example, this stock shows a 91% gain on 10-Jan-2014. By browsing the news reports, I cannot see anything that might explain or contribute to a jump like this.

Is it safe to assume this is a pump & dump scam and possibly quite a few people got (or will get) ripped off?

7

Yes, in my humble opinion, it can be "safe" to assume that — but not in the sense that your assumption is necessarily or likely correct.

Rather, it can be "safe" in the respect that assuming the worst — even if wrong! — could save you from a likely painful and unsuccessful speculation in the highly volatile stock of a tiny company with no revenue, no profits, next to no assets, and continued challenges to its existence:

"There is material uncertainty about whether the Company will be able to obtain the required financing. This material uncertainty casts significant doubt about the Company’s ability to continue as a going concern."

As a penny stock, they are in good company.

Still, there are a variety of other reasons why such a stock might have gone up, or down, and no one [here] can say for sure. Even if there was a news item, any price reaction to news could just amount to speculation on the part of others having enough money to move the stock.

There are better investments out there, and cheaper thrills, than most penny stocks.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.