Tuesday, May 31, 2005
Stock tip spam?
So the nature of my spam has taken a turn as of late. It used to all sell something. That made it easy to find out who the culprit was and send their ISP a report. About 2 months ago, the nature of my spam started to gently drift over to being predominantly "stock tips". This got me wondering: are these tips worthy of following? Even if they are complete B.S., is the spammer going to generate enough volume that the stock might actually go up?
So I looked into it. The first decent "tip" that I got was for CSYT. This was back in January, and the email claimed that the 6th and 7th had shown a huge increase with lots of volume. Sure enough, a quick check with your favorite stock quote tool will show a huge spike in price and volume on the 6th and 7th. The email came out on Sunday the 9th with a promise of big things Monday. Sure enough, big things happened on Monday. Trading volume was again more than 10x average, and the stock tanked. So much for my simple "pump-and-dump" theory. I would have expected the dump to come Monday, but maybe I'm just ignorant.
Let's look at another. VCSC. This one was sent January 18. It promises a 3-fold increase in price over 5 days, and a 4-fold increase in 15 days. To the charts... There is clearly the "dump" volume on the 20th, but the price climb that occurred was weeks earlier. These guys are more sophisticated than I was giving them credit for.
Clearly, they are "pumping" the stock through other means. Spam is just one of their outlets. My conclusion is that there is now way to "piggyback" on their pump-and-dump through the use of their spams.
I'm going to have to look into this further.
update 23-August-2005:
Here's an interesting article that sheds some light on what was going on - though I still don't understand why I was getting emails AFTER the dump had happened... Anatomy of a stock fraud
So I looked into it. The first decent "tip" that I got was for CSYT. This was back in January, and the email claimed that the 6th and 7th had shown a huge increase with lots of volume. Sure enough, a quick check with your favorite stock quote tool will show a huge spike in price and volume on the 6th and 7th. The email came out on Sunday the 9th with a promise of big things Monday. Sure enough, big things happened on Monday. Trading volume was again more than 10x average, and the stock tanked. So much for my simple "pump-and-dump" theory. I would have expected the dump to come Monday, but maybe I'm just ignorant.
Let's look at another. VCSC. This one was sent January 18. It promises a 3-fold increase in price over 5 days, and a 4-fold increase in 15 days. To the charts... There is clearly the "dump" volume on the 20th, but the price climb that occurred was weeks earlier. These guys are more sophisticated than I was giving them credit for.
Clearly, they are "pumping" the stock through other means. Spam is just one of their outlets. My conclusion is that there is now way to "piggyback" on their pump-and-dump through the use of their spams.
I'm going to have to look into this further.
update 23-August-2005:
Here's an interesting article that sheds some light on what was going on - though I still don't understand why I was getting emails AFTER the dump had happened... Anatomy of a stock fraud
