What would be the mechanics of running a stock up? Just off the top of my head I would look for times when trading volume was low. I would look at the book and see where the bid asks were at. I would place several large orders for at the market and see what happens. More specifically - what would you look for in the bid ask? How would you define "large order"?
First and foremost you pick a stock with a tight float -- relatively few shares in public hands/weak hands. Pros refer to those shares as what's "against them". Many years ago -- pre-Nasdaq -- my partner and I owned the control block of a tiny public oil and gas company. We owned nine million shares which I had in my desk drawer. Those shares represented the entire float except for 9,853 shares which were in the hands of the public. The stock was quoted in the "pink sheets" at 3.50 x 4.00 "valuing" the entire public float at under $40,000. Granted it was a different regulatory environment at the time ... in fact it was a different world. Yet the concept remains the same. If you are going to "peg" a bid it is important to know how much stock will hit that bid and important to know that you can afford to buy what hits you and then move the bid up while absorbing affordable quantities on the way up. Once the "easy' stock finds its way into your hands the PR begins -- WILL THIS GOLD FIND KICK OFF THE MADDEST RUSH SINCE CALIFORNIA IN 1849!!! -- and you are off to the races. If you can find a long out of print copy of THE MIDAS TOUCH you will have not only have the course Stock Promotion 101 you will have it through the post doctoral level. At the time most of the great small company stock promoters were Canadian and amazingly many of them came from a few block area in Montreal. A well capitalized promoter without much stock against him and a feel for strong PR appeals can take a stock through the roof on increasing volume and liquidate an astonishing large position as he turns from being the bid to hitting the bid. And, as Livermore points out, he sells most of it on the way down. Hey ... the public loves a bargain!
Thanks for posting this, I was wondering how it's done. I've always wondered how the pump and dump works. I can recognize the chart on a pump after it's happened, which is not anything special. I'm sure alot of the guys on here can tell what a pump looks like.
Why not 777? I was 24 years old and it was 40 years ago. It might open a few eyes and cause people to realize stocks are sold so people can make money and the guy selling to you might well have bought it much cheaper and closer to value. I read a lot on here from guys who pretend to know how it works when in fact they know nothing. This question was in my wheelhouse so I thought I might lay it out there before i had to listen to ten imbeciles tell him how they think it works. I was in the manufacturing end not the sales end. That is what investment banking is -- manufacturing shares for salesman to sell. Plain and simple.
I think a more typical pump&dump scenario would be the ones attempted on various daytrader message boards - yahoo, ihub, stocktwits, et al. - where the pumper(s) buys a load of shares quickly. Probably 50-200K for some pennies stocks that are not too liquid - NO market orders, mebbe just limit 5% above ask, and immediately issue posts and alerts to generate buy volume to sell into before any other real sellers catch on. This seems to work repeatedly since there are those who never seem to catch on to the game.
Yep, that was my point. It's rare to have anyone tell it like it is here, so it always comes as a shock when I see it. 95% of this crowd won't even understand it.
The yahoo message board pumps are pretty easy to spot. Usually something like, watch "stock symbol" she's gonna blow", or something silly, then when you go to the chart you see the price has already done it's run. Still, interesting and when you think of the bigger stocks, it would seem that the media does pump and dump as well. Cramer for one, tout's BAC when it was $14. BAC at 5 and change today. Because of his popularity, maybe alot of investors don't see through the story.
OP was asking what it would take to move a stock a certain amount before pumping it, so I was giving a hypothetical example for a small-time board pumper as opposed to a Cramer or accumulating the entire float type deals. Obviously not saying that garbage posting on yahoo will bring any buying interest.