Promoter

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Definition

A stock promoter is an informal term for an individual or company that receives compensation for promoting a stock. This is done to help illiquid securities generate dollar volume. This is often done as part of a market manipulation scheme known as pump and dump where the price is artificially driven higher so that the securities can be sold.

Stock promotion is not illegal in itself but often is connected to related illegal schemes such as manipulative trading, distribution of false information, and securities fraud.

Promoters must disclose whether or not they were compensated for the promotion. Promoters who do not properly disclose could face criminal charges.

Stock promoters first relied on cold calling prospective investors to acquire stock in a company, and then later moved on to using the Internet, which provides for a much more efficient method of promoting a stock to a wider audience.

Usually, stock promoters promote penny stocks because of the difficulty in finding information on these companies as they are normally listed on the OTC Bulletin Board or Pink Sheets LLC|Pink Sheets, which do not require that companies provide as much financial information as other exchanges, such as the NYSE.[1][2]


Notable Promoters

The Wolf

At the beginning of 2014, a new promoter by the name of The Wolf of Weed St emerged. The name, adapted from the wildly popular Leonardo DiCaprio film, was quick to catch on during the OTC Pot Stock boom of early 2014. The Wolf has been accused of pumping and dumping shares, in addition to bashing other stocks to drive the price down. At one point, a very public dispute emerged between The Wolf and FITX CEO Bill Chaaban, which ultimately led to a public apology from Chaaban. The dispute arose when Chaaban posted The Wolf's real name, Jason Spatafora, in addition to other personal details.

Silk Dynasty

Silk Dynasty really broke through into the spotlight after their SLNX "pick" in March of 2014. Since then Silk has had several other successful picks including, NWGC, a gold mining corporation. Silk has aligned with Teacup Piglets, and ComputerBuxx.

Mr. Bottom Bouncer

This promoter calls chart plays, generally based on when they feel a stock has bottomed out, and a reversal is imminent.

The Breakout Bulls

Similar to Mr. Bottom Bouncer, except the Bulls call stocks which appear to be nearing a point of resistance and have the potential to break out in a bullish manner.

ComputerBuxx

Even though this promoter lucked into an affiliation with Silk Dynasty, he continues to consistently post about MINE, a highly polarizing company trading on the OTC Pink market.

BIGMONEYMIKE

IT IS ASSUMED BY MANY THAT THE CAPS LOCK KEY ON BIG MONEY MIKE'S COMPUTER IS BROKEN. HE GAINED POPULARITY WITH THE HASHTAG #TEAMFAM. HIS 15 MINUTES EXPIRED QUICKLY, AS HIS PICKS WERE AWFUL AND NOBODY WANTED TO PLAY HIS PUMP AND DUMP PICKS.

OPC

OPC attempted to gain notoriety for his "Boom Room" day chat in which he would hand select users from Twitter and possibly other sources for a "day trading" room. His ulterior motive was exposed when a screenshot was leaked to the general public in which OPC himself was shown to instruct his users to "load here", and given subsequent instructions on how to "blast" social media including iHub and Twitter with content.

OPC denies that the stock was a pump and dump, but the chart seems to suggest another story. The pick, PNCH, was shown to have 6 times the normal daily volume the day of the "load", and had very low volume the next day during the alleged "dump" in which his chat room members released an array of information about the stock via social media.

In addition, a large percentage of OPC followers are found to be fake according to www.twitteraudit.com, a sign that this user purchased followers in order to give himself more credibility in the Twitter world.


This article uses material from the Wikipedia article <a href="http://en.wikipedia.org/wiki/Metasyntactic_variable">"Metasyntactic_variable"</a>, which is released under the <a href="http://creativecommons.org/licenses/by-sa/3.0/">Creative Commons Attribution-Share-Alike License 3.0

Warning

Playing promoters picks can be very dangerous. These stocks whip around wildly as a surge of volume from beginners to experts emerges. It's possible to see a 100% gain at one point in the day, and close red on certain promotions. Experienced traders tend to ignore promoter's calls, and instead stick to playing the chart, regardless of where the volume is coming from.


Remember, this is a zero sum game. Somebody wins and somebody loses every single time.

Additional comments

Promoters are commonly confused with day traders who post updates throughout the day about chart movements, interpretations, and their plays. Day trading is a highly specialized skill which should not be attempted by novice traders. For more info, see the Stockwiki Article Day Trading.