The Anatomy of Pump N' Dump Stock Spamming

Discussion in 'Wall St. News' started by trade2mini, Jan 21, 2007.

  1. Laura Frieder and Jonathan Zittrain have analyzed pump n' dump spam activity in their paper 'Spam Works: Evidence from Stock Touts and Corresponding Market Activity'. Unbelievably, it appears that spammers are able to achieve a 5% gain on pumped stock before dumping it, along with a dramatic increase in transaction volume of the stock. From the synopsis: ' We suggest that the effectiveness of spammed stock touting calls into question prevailing models of securities regulation that rely principally on the proper labeling of information and disclosure of conflicts of interest to protect consumers, and we propose several regulatory and industry interventions. Based on a large sample of touted stocks listed on the Pink Sheets quotation system, we find that stocks experience a significantly positive return on days prior to heavy touting via spam. Volume of trading responds positively and significantly to heavy touting.'
  2. I see you've been reading slashdot today. Interesting paper. One of the slashdot posters mentions this site

    which seems to monitor effects of spam on individual stocks.
  3. I wish them the best with their intervention efforts... but knowing this it would be interesting if there was a morning Spam Index... along with the usual Broker up/down grades... :D


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