BLACKROCK Municipal Income TRUST V.BFK.P

RE:How Underwriters and Short Sellers Manipulate Share Prices

[quinlash]

Why HEXO is unlikely to be a Pump and Dump    
 
First off… What is a Pump and Dump?

Pump-and-dump is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme already have an established position in the company's stock and sell their positions after the hype has led to a higher share price. This practice is illegal based on securities law and can lead to heavy fines

Link to Reference
https://www.investopedia.com/terms/p/pumpanddump.asp
 
A Pump and Dump scheme is a real thing and it happens more than one would like to think possible on the stock market.  Companies are formed and unscrupulous individuals intentionally set out to promise investors large payouts while not producing anything in regard to products or services.

So why is it unlikely HEXO is one of these?

1 – We have seen the company produce products and sell these products through Government of Canada websites.  We have also seen them involved with deals with each of the provinces, including s billion-dollar deal with Quebec.

2 – Royal Bank of Canada has been the auditor on several the deals put forward by HEXO.  Royal Bank would never risk associating their name with a company they suspected was not legitimate

3 – We have seen not 1, but 2, joint ventures formed between HEXO and Molson-Coors.  Molson-Coors would have not only had their own bank review the deals but would have done some of their own due diligence on HEXO to ensure their investment, and more importantly, their reputation was not being put at risk by working with HEXO

4 – Canaccord, a large under-writer, as invested over 100 million dollars with HEXO through the purchase of shares.  Canaccord, again, like Molson, would not risk getting in bed with a company that it suspected may not be successful in the future.
 
 
 
 

Financials101 wrote:

Article exposes the techniques used by offshore hedge funds to manipulate the price of these pump and dumps ahead of stock offerings. 

 

https://stocktrades.exchange/2020/03/14/hmny/