Comments on: “Pump and Dump” Is a Pejorative Term and Rightly So http://blog.redchip.com/index.php/redchippresident/pump-and-dump-is-a-pejorative-term-and-rightly-so/ RedChip SmallCap Ideas, for Tomorrow's Blue Chips Wed, 08 Feb 2012 19:35:29 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: James http://blog.redchip.com/index.php/redchippresident/pump-and-dump-is-a-pejorative-term-and-rightly-so/#comment-458 James Wed, 12 Jan 2011 03:56:16 +0000 http://blog.redchip.com/?p=905#comment-458 I worked in corporate finance in the past and I will tell you 95% of all the companies that a firm issues research on are companies that have financing done with that firm. A firm will finance a company then have their research department issue research on it with target prices (usually higher than the issue price of the finance)and have them pump the story. This is called the "legal way to pump and dump stocks!" Happy Trading! I worked in corporate finance in the past and I will tell you 95% of all the companies that a firm issues research on are companies that have financing done with that firm.

A firm will finance a company then have their research department issue research on it with target prices (usually higher than the issue price of the finance)and have them pump the story. This is called the “legal way to pump and dump stocks!”

Happy Trading!

]]> By: Steve http://blog.redchip.com/index.php/redchippresident/pump-and-dump-is-a-pejorative-term-and-rightly-so/#comment-457 Steve Sat, 01 Aug 2009 12:50:54 +0000 http://blog.redchip.com/?p=905#comment-457 Dave, Appreciate the points about banking fees for services which aren't overtly 'investor relations' as well as that the relative sums involved. I would assume that small-cap and particularly development stage companies would spend a greater proportion of their budget on IR, although you would know better on that score. Thank you. Steve Dave,

Appreciate the points about banking fees for services which aren’t overtly ‘investor relations’ as well as that the relative sums involved.

I would assume that small-cap and particularly development stage companies would spend a greater proportion of their budget on IR, although you would know better on that score.

Thank you.

Steve

]]> By: Dave Gentry http://blog.redchip.com/index.php/redchippresident/pump-and-dump-is-a-pejorative-term-and-rightly-so/#comment-456 Dave Gentry Fri, 31 Jul 2009 16:09:15 +0000 http://blog.redchip.com/?p=905#comment-456 Steve, Thank you for your comments. As noted above, the major study on company paid-for research provides concrete and conclusive evidence that RedChip's analyst forecasts are as accurate as traditional research. Research from Morgan Stanley, Smith Barney, et al. lost investors billions during the dotcom bust. They receive millions in banking fees from many of the companies they cover. Moreover, the average NYSE company spends over $300,000 a year on investor relations. We encourage investors to do their own homework before buying any stock. Dave Gentry Steve,
Thank you for your comments. As noted above, the major study on company paid-for research provides concrete and conclusive evidence that RedChip’s analyst forecasts are as accurate as traditional research. Research from Morgan Stanley, Smith Barney, et al. lost investors billions during the dotcom bust. They receive millions in banking fees from many of the companies they cover.

Moreover, the average NYSE company spends over $300,000 a year on investor relations. We encourage investors to do their own homework before buying any stock.

Dave Gentry

]]> By: Steve http://blog.redchip.com/index.php/redchippresident/pump-and-dump-is-a-pejorative-term-and-rightly-so/#comment-455 Steve Fri, 31 Jul 2009 07:53:31 +0000 http://blog.redchip.com/?p=905#comment-455 Dave, 'Pump and dump' accusations seem absurd. However, as long as your company receives compensation for investor relations (or whatever the term may be) services, how can investors treat your opinions as that of an independent advisor? Obviously this is a different animal, but if Morgan Stanley upgrades a company my assumption is that they are not paid for that opinion by said company. Thanks for filling a gap in the market in any case. Steve Jensen Dave,

‘Pump and dump’ accusations seem absurd. However, as long as your company receives compensation for investor relations (or whatever the term may be) services, how can investors treat your opinions as that of an independent advisor?

Obviously this is a different animal, but if Morgan Stanley upgrades a company my assumption is that they are not paid for that opinion by said company.

Thanks for filling a gap in the market in any case.

Steve Jensen

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