TMFStockSpam's March to the Top of the Charts

Last year I blogged about a neat effort by some Motley Fools' on tracking stock spam.

First off a little background, the Fool has a game called CAPS, you can think of this like fantasy baseball, but its for picking stocks. So you pick a stock like say MMM and you enter whether or not you think it will out perform or under perform the S&P index over some period of time. Then you get points if you are right and by how much it over performs or under performs. There are over 72,000 players. (*)

So its a pretty straightforward concept, you get points for picking the right stocks. Now with that background, here is the part of interest to security. You know the gajillion stock spam messages you get typically around small cap penny stocks that you've never heard of (and wish you never had)? Well, two Fools set up an account TMFStockSpam, they take the penny stock fraud/spam messages, enter them into the CAPS engine as picks that they shorting (meaning they predict they'll go down - "red thumbing" in CAPS parlance).

TMFStockSpam has 149 active picks that it is shorting. Last year around this time TMFStockSpam was ranked  5,368 out of 69,524 players, how about now? Simply shorting the stocks mentioned in Spam TMFStockSpam is ranked 42 out of 72,754. This is the equivalent of Sherman's march to the sea.

The single best short distinction goes to GGII.PK which is down 99.5% so far. But there are many others down over 90%. Its interesting to watch the stock spam play out  over time. As  an additional bonus TMF Stock spam posts some of the messages that accompany the stock spam.

Here is the thing - for these small stocks to move around, someone has to actually buy it for it to go up before it plummets 90%. If this is the case, and the returns above show why stock spammers like this business, are we to understand that people not only click through SSL warnings, ignore Google's warnings about malware on linked sites, apparently buy Viagra and other things, but that they also purchase stocks in companies because someone emailed it to them???

Granted some of the pitches sound good, but again its real dollars at work, and real dollars being lost, too. Out of TMFStockSpam's picks I count 72 out of 149 as having lost over 70%! That is a lot of cabbage!

Comments

[LonerVamp]

What little I have browsed around penny stock boards/forums (prompted by a certain anti-rockstar someone in atlanta,ga), I'm amazed at the...people...who partake of such things. They're, quite frankly, like 12 year old children playing some game with their penny stocks. I guess with small chunks of change you can just kinda play along as a hobby without actually risking all that much (or maybe to them, it *is* a lot!).

But yes, someone somewhere buys that junk, and maybe not from stock spam in emails, but also spam PR posts (by that certain someone) that get picked up on newswires, which may then feed such automated buy processes or those people watching for those news wires.

And then of course it promptly gets diluted/dumped. And as seen by that account...quite predictably.