WARING ABOUT THIS BOARD!A warning about this board!
A StockHouse Investor Protection Special Report: 9 Red Flags that
Identify Online Message Board Scammers
Miami, FL, May 4 /SHfn/ -- The continued explosive growth of online
message boards often victimize the novice investor. Notorious
posters cloaked in the anonymity of a chat forum can easily deceive
many first-time visitors to message boards. The StockHouse.com ®
RapidResponse team has identified 9 Red Flags that may help
prevent being misled.
Who is the name behind the message your are reading? In many
cases, you will never know. Dishonest posters can fool even the
+respectable+ message boards. One leading message board claims
their $50 registration fee eliminates such dirty tricks, but many stock
manipulators get around this by sending in $50 money orders, instead
of surrendering their credit card numbers. The checklist below offers
some of the ways you can spot manipulative posters. The list is more
of a rating system than absolute con-artist detection list. The greater
the number of violations by a poster, the more likely he or she is
promoting the stock for some ulterior motive. One or more violations
do not necessarily mean the poster is a stock promoter, but continued
violations over many stocks may identify someone as such a person.
THE RED FLAG CHECKLIST
1. Someone who hyper-posts on only one stock. During the
promotional run of that stock, he may be posting between 8 and 20
messages daily (sometimes more). He will promote for only so long
until he has exercised the stock options that he has been paid to
promote the stock or until his cash contract with the company
expires.
2. Someone who uses multiple identities. This is hard to detect.
Generally, the poster will run with one identity until he has become
despised on the message boards. Then, he will register again with a
new identity. If one carefully studies such an individual, it will be found
that he posts repeatedly about the same set of stocks, or just one
stock. He will post during the same time each day or night. His
messages will commonly be the same length. His writing style will be
similar and he will use the same phrases or key words in his
messages. Often, this is the hired promoter. He is paid to post on
message boards throughout the Internet, either in cash or stock
options.
3. Someone who repeatedly attacks or belittles others on a stock's
message boards. This goes beyond the simple heated debate with
one or two members who disagree with him. If you carefully read his
messages, this promoter will sound like he is fighting for his life --with
nearly everyone who challenges him. This might be the CEO or
investor relations employee for the company or it could also be a hired
promoter.
4. Someone who emerges as the stock's moderator, or even the
leader of the discussion group or that stock. This person is different
from someone who has a genuine fundamental understanding of the
company and who is also helpful. A promoter/leader will diligently
answer to virtually every negative comment made on +his+ message
board. He will also cheerlead every positive comment and constantly
make an appearance on the message board to +show+ he is still the
boss. Again, a paid promoter.
5. Look for the poster, with a short history in their member profile, who
suddenly shows up during a stock runup, and appears to know +all
about+ the company. This person is different from the excited investor,
who just bought shares in the company and is enthusiastic about it.
The impostering poster hints at +inside information+ and quickly
name-drops some connection to a company insider or employee.
While the +excited+ investor may rave about something an investor
relations employee told him, the imposter hints at important, but as of
yet unannounced, development(s) that may impact the stock price.
6. Someone who is nearly always the first to respond to company
developments. Occasionally, someone else will beat him to it.
Otherwise, he's first or a close second almost every time. Paid
promoters are paid to be on their toes. Commonly, he will positively
spin the news, to soften the blow of less than good news or to make
good news appear better than it actually is.
7. Someone who continuously hints at upcoming company
developments, unreleased company news, unannounced contracts
and forecasts discoveries in natural resource exploration stocks.
Where did he get his information? Usually, he is the one who starts
the rumor and might often state that he heard it from someone else.
Yes, he did - a company insider. This is where the old cliché (Buy on
the rumor; sell on the news) comes from: the company insider who
leaked the news. Paid promoter or company insider or long-term and
trusted follower, who is also a significant shareholder.
8. Someone who hypes the company during the runup and then
+changes+ his mind and begins attacking the company, the company
insiders and the project. This individual is different from the enthused
investor who realized he was just scammed. That person is less
controlled in his emotions, which is evident in what they write in their
postings. The hypester carefully controls his statements, both up the
chart and back down. On the way up, he may help the stock move
higher by adding to the cheerleading, so that he can build a
substantial short position. Once he changes his mind, it stays
changed, though. The +excited+ investor is confused and sounds it,
when you read his messages. The latter hasn't the slightest doubts
about his position on the company.
9. Someone who goes out of their way to find bad news about the
company and makes a +case+ out of it. These individuals might
include ex-friends, ex-family (divorced) and ex-employees, including
ex-promoters. Such people don't just post a single negative item.
They either take one negative and make it look like +the sky is falling+
or they continuously bring it up. That an individual makes frequent
appearances to vent their spleen is the clue, which gives them away.
Disgruntled investors usually move on and don't want to be reminded
of their bad investment. One way to cross-check the message board
postings to determine if there is an escaped fraudulent manipulator at
large is to compare his posts against the company news releases.
The fraudulent companies generally amplify their slightest
achievements and play down their failures. Companies with a history
of failures - running a company into the ground, never achieving
anything of merit and diluting their market value through the repeated
issuance of new shares via private placements or secondary
offerings - tend to hire the most egregious and unscrupulous
promoters. The above 9 Red Flags are by no means a complete list
of warnings signs and should only be used as guidelines to protect
yourself from fraudulent messages and posters.