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Feeding the spammers

Dwight points to a story about the latest spam craze and asks the obvious question: “Who are the idiots that buy stocks touted to them in spammed email?”

Spam messages that tout stocks and shares can have real effects on the markets, a study suggests.

E-mails typically promote penny shares in the hope of convincing people to buy into a company to raise its price.

People who respond to the “pump and dump” scam can lose 8% of their investment in two days.

Conversely, the spammers who buy low-priced stock before sending the e-mails, typically see a return of between 4.9% and 6% when they sell.

The study recently published on the Social Science Research Network say their conclusions prove the hypothesis that spammers “buy low and spam high”.

I really wish I better understood the mentality of people who fall for this sort of thing. The only way spam can be a profitable business model is if there’s a pool of people who respond to them regularly. I hope some day to meet one of these people so I can ask them about their experience and maybe understand it all a little better.

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2 Comments

  1. Dale says:

    Actually, I’ve made money off some of the pump-and-dumpers. It’s a treacherous game, admittedly, but that’s where the thrill comes in — successfully dumping before the pumpers dump. It is highly speculative but not as dangerous as, say, options — as long as the speculator understands the dynamic exactly.

  2. Katie says:

    Not everyone is as informed as we are I guess. I got the Bill-Gates-is-going-to-pay-you-to -forward-this-email email last week. You’d think everyone would know that is a hoax. Guess not.