Identifying Pump & Dump Schemes.

Icahn has a stake in NUAN.

redbaron1981 said:
Just received this email lets see if they pull it off.

"You GOT to watch this stock! If You Read This Before The End Of Day You
Are Lucky!

Company Name: Nuance Communications, Inc
Last Trade: 15.50
Ticker: NUAN
Trading Date: Nov, 5th
Long Term Target: 17.00

Tomorrow at 3pm EST get ready for our new HOT STOCK Pick Alert!!! Sub
Penny Alert Coming Tomorrow Morning, Read More Inside."

How any one would fall for this BS amazes me but who knows may work.
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I saw Nuance two different ways the last couple weeks. They're running a radio ad for a "pdf" software. This is in competition with Adobe I guess. The second is that they made the "most declined" stock filter I run around Friday.
 
redbaron1981 said:
Hi Guys,

This is my first thread on Elite trader as I normally hangout at forexfactory.

To cure my interest today I decided to do a little research into what stocks maybe worth purchasing due to the Ebola outbreak. Stocks such as those in the pharmaceuticals sector along with also personal protective equipment manufacturers.

What surprised me when I googled was how many reports of pumping and dumping of the stocks that might play a vital role in dealing with the outbreak. Please see the attached image of Lake stock.

Obviously liquidity is limited on these stocks hence the large price rises on buying but have any of the successful traders on this forum had any methods of identifying these schemes? It would seem that when you have the herd pushing stocks as much as in the attached example there is large miss pricing that can be taken advantage of either by buying up with the pumpers or shorting when the herd gets scared.

I am not by any means a pro trader but I like the idea of having a lot of one sided order flow to help me into a position and if there were way of identifying this a lot of profit could be made from it.

Your thoughts or ideas would be much appreciated.
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If you look at a lot of the new companies with neg earnings, they all fit the same pump and dump criteria. the only difference is you have an institution trying to sell it.
 
redbaron1981 said:
Sorry I was trying to type on my iPhone. It sounds like post earnings drift but can you explain more.
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Well, if you think about the concept of an IPO and look at what they are using the funds for, its often used to pay for debt. for us retail traders, the price we pay is for theoretical "unlimited growth" instead of guaranteed return like loans have.

If a company is working efficiently and growing, why would they want to offer a piece of their company? theres good reason to. Even if they have a plan for expansion, that segment of the business is unproven. Its like, if you can serve 100 people efficiently at a restaurant, theres no guarantee that you can serve 1000 people with the same standard.
 
Also sometimes there's an economy of scale that makes it better for a company to sell shares than to slowly grow size. Or there's a risk of competition unless they're quick. But having made excuses for them, I would never buy into an IPO. Well at least I would never buy in as anything other than a short term trader. And on the other hand, what's the saying? Ah, here it is: "Never name the well from which you will not drink."
 
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