Slashdot Mirror
Buy Low, Spam High
An anonymous reader writes "A recent study on spam has revealed that spammers see a return between 4.9% and 6% when selling stocks they have bought low and spammed the world with." From the article: "The researchers say that approximately 730 million spam e-mails are sent every week, 15% of which tout stocks. Other estimates of spam volumes are far higher. The study, by Professor Laura Frieder of Purdue University in the US and Professor Jonathan Zittrain from Oxford University's Internet Institute in the UK, analysed more than 75,000 unsolicited e-mails. All of the messages touting stocks and shares were sent between January 2004 and July 2005."
After watching these a few times, I actually tried buying one of the stocks. The best chance is if you look at the stock and it hasn't risen any yet (meaning you get the email before everyone else).
I bought about $100 of a $.20 stock and wound up selling it for $.55. I've stayed away from them though usually as I seem to only look at them after the price is moving.
I wonder if it is against NASDQ/NYSE/etc exchange rules for a company to knowingly engage or have a 3rd party engage in unsolicited spam to promote the stock.
If it is NOT, then I think it should be. I could see how a spammer who is long or short on a stock could do this without the company knowing, but if it could be proven, perhaps it would be analogous to issuing a public statement by the company.
Thoughts?
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
So the US stock market hisorically has returned over 10% a year, current yields on low-risk money market funds is over 5% and US Treasury funds historically have generated at least 5% a year as well.
So you can invest in a cheap index fund in any of the above and beat what these guys are doing. Or, you could run a pump and dump stock scam and risk huge jail time instead. This also doesn't include paying taxes on all your stock transactions which will lower your return even further. Sounds like a great deal to me.
The SEC should be able to find these people by the stock transactions pre/post stock spamming campaign. Anyone who tries doing this activity is a complete moron and is going to be caught eventually.
At first I thought "who are these stupid people buying stock from spammed tips?", but then I figured as long as you are one of the first to buy - you will gain almost as much on the stock as the spammer, without having spammed anyone.
I guess the trick is to get onto a spam list that has the largest effect on the market (the widest distribution?), and get in early (perhaps many many e-mail addresses?) and try to be at the start of the spam list (perhaps addresses aaaaaaa@mail.com, zzzzzzz@mail.com etc).
As long as you get in early on stock being manipulated, and your not the one doing the spamming, your less guilty than the spammer and there is a slightly better chance you'll get away with it....
I forwarded these to the SEC (enforcement@sec.gov) for a while until I noticed that they are careful not to make illegal claims. If they phrase the spam like they're stock researchers - "1 week target $5" - there's nothing illegal - nothing a legit broker couldn't do.
These schemes are called "pump & dump". And unlike legit brokers, pump & dump schemes are illegal no matter how they're phrased.
You should resume reporting these to the SEC.