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TheFoolishEdge (< 20)

Tips To Identify Pump And Dump Schemes



February 07, 2011 – Comments (6)

Here are a few quick tips to help identify pump and dump schemes:

-Visit the SEC site and review all the companies public filings

-Look at the structure of the company

-Examine the trading and price history

-Take a close look at the founders of the company (previous experience, background, etc.)

-look at the percentage ownership of the company (insider, retail, institutional)

-Look at any VC investors that have made investments in the company

These are only a few of many ways to look for possible problems in a company.  If you have any more quick tips please feel free to comment.


6 Comments – Post Your Own

#1) On February 07, 2011 at 7:37 PM, Bays (29.16) wrote:

Don't really understand your post?  You're not telling investors what to look for?  Just where to look. 

Let's pretend I know nothing about investing... (like a lot of beginners on this website)

OK I've looked at the structure of the company, now what?

OK I know the percentage of insider iwnership, now what? 


I like the idea of this post, but I think you can make it much more worthwhile by adding to your points!

Just my opinion.

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#2) On February 07, 2011 at 7:38 PM, Bays (29.16) wrote:

It's kind of like making a blog titled:

How to find undervalued companies:

Look at management,

Look at the product

Read the financial statements, and proxies. 


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#3) On February 07, 2011 at 7:39 PM, goldminingXpert (28.83) wrote:

Or, just look at IBIO and avoid companies like that.

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#4) On February 07, 2011 at 10:22 PM, Bays (29.16) wrote:


Nice article on seekingalpha, it looked like it even forced some  Yongye employees to create accounts to counter argue. lol

I was surprised their IR was so quick to respond. Kudos to them.

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#5) On February 08, 2011 at 4:46 PM, TheFoolishEdge (< 20) wrote:

Good point Bays.

I will elaborate on each of the points in future blog entries.  Each point should probably have a separate blog entry. 

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#6) On February 08, 2011 at 5:08 PM, Bays (29.16) wrote:

Look forward to them!

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