Penny Stock Alerts Are Scamming People and Detrimental — TechVirtuosity
Penny Stocks Are Too Easy to Manipulate
Penny stock alerts are a scam not because they help to give you an insider tip, but because of the ones who create the tips. Because penny stocks are cheap (hence their name “penny stocks”), they allow larger companies to manipulate them. It’s much easier to buy thousands of shares of a small company than it is to buy a thousand shares of Microsoft.
It’s detrimental to smaller companies that are starting out when a larger company uses them as a manipulative tool to make quick cash. But that doesn’t mean you shouldn’t use penny stocks. I’m going to show you why the alerts produced by scammers are the real culprits!
Penny Stock Alerts Are Created for a Purpose
Several websites out there promise to give you a leading edge with your money. They promise you the first chance at buying a stock that is bound to skyrocket that day or soon. Not so surprisingly, they often don’t tell you the name of the stock until a set time or day.
Because these scammers need more members to sign up, they reach out on a consistent basis. If no one invests in stocks through their alerts then they make no money (I’ll explain this in detail later). They need everyone they can get to turn a penny stock into a big profit.
These alerts were created for a reason to make money. You’re not included in that big profit margin they want. You’re only the means to reach that goal and sometimes you’ll earn big too, though not intentionally.
Penny Stock Alerts Are a Scam
It doesn’t matter what company is promising you big profits. Penny stock alerts are a scam because they play the market. By using several people to buy the same stock it inevitably causes it to jump up rapidly. If you’re very quick and lucky you’ll buy and sell faster than the other members on the alert.
But the scammers are the ones who ultimately profit. They purchase the penny stock before they release the alert to you. They buy the stock at the cheapest possible cost and then they later release the alert to you. Then you, including everyone involved will invest in that stock. The stock will rise and the scammer will sell at a larger profit.
The point of this scam isn’t to make you money, only the one making the alert. Penny stocks are cheap and easy to manipulate which puts them at a high risk.
Penny Stocks Alerts Hurt Small Businesses
Typically investing in a company shows that they have potential. The stock market and investors trust a company based on their returns on investments. Companies like Apple, Tesla or Microsoft have a strong performance. With penny stocks, those skyrocket one day and hit all time lows the next day. It’s different.
When a stock is highly volatile it means that it’s a higher risk. Your investment could be gaining one day and have large losses the next. Scammers who create alerts are potentially making small startups lose trust. When investors lose out because of a stock crashing, it deters others.
Sadly, penny stocks have a high failure rate to begin with. Which is the other argument of these scammers. If nearly all penny stocks fail, what’s wrong with using them to make money? It’s a choice but it doesn’t justify the action…
Penny Stock Alerts Are Scamming People
Whether a penny stock is failing or not shouldn’t make it a money scheme. All of these websites that offer alerts are in it for themselves. It’s one thing to educate you on good investments and another thing to steal your money.
Ultimately, it is no different than a scammer stealing your money. Even if you succeed in one alert you will lose money on others. It could be hundreds of people competing with you to buy and sell first. This creates an environment where very few if anyone will make a huge profit.
Scammers always ensure they’re first to the investment. Thousands of people are losing money on these alerts. For some people they are losing money that they can’t afford to lose.
Scammer Techniques Vary but Their Goals Don’t
Most scammers that you’ve heard about are probably the email or phone callers. They ask you for a donation or they pretend to be a prestigious organization. Scams on the computer are not different than scams in the stock market.
Penny stocks do trigger a type of gambling in us. It’s tempting for example, when we see investments starting at $0.07 with the potential to hit $0.30. You might automatically assume you’re going to double or triple your money. If you do manage to make any money then you set yourself up for a larger loss the next time.
Sometimes the penny stock alerts are a scam in a different way…
Scammers Make Money in Different Ways
Sometimes the penny stock scammers are making money in a different way. Do they require your name, email or personal information? It might not be about your investment at all. Information is also very valuable to scammers.
Then in other scams they might be playing the stock market and selling your information! In this case they are making money from your investments and selling your personal information.
Avoid the Scam, Ignore Penny Stock Alerts
The scams stay the same but their wording changes. I’ve seen them use keywords like “ artificial intelligence “ to convey to their readers. AI can’t guarantee that you make money and it’s highly unlikely they are using one.
In other situations they may promise to have an insider who knows what’s going on. Or maybe they are bragging up some expert they have. In both cases they are probably lying.
Even if they have all of the above, the stock market isn’t always possible to predict, much less a penny stock. Keep your money and invest in stocks that you know and trust. Don’t sign up for the alerts that make these impossible promises.
Have advice for others? Share your thoughts below!
Originally published at https://techvirtuosity.com on November 28, 2020.