Most shareholders do not know or understand how IR
Post# of 5401
Posted On: 07/29/2012 4:04:15 PM
Most shareholders do not know or understand how IR and IA (Investor awareness) companies work. Shareholders tend to blame a stock price’s sudden fall on the only visible source, meaning the accountant, the lawyer, the company, the CEO, the IR to name a few. This is not about who’s to blame but rather to understand how the system works.
For this demonstration we will use “air plane flights” and “code share” scenario. Oddly enough, IR campaigns are also called flights.
To that end, just like airplane flights, IR/IA service “flights” range in length. Typically, a short term flight breaks the ice, the midterm flight preserves the new volume, while a long term flight like Mina Mar stays in.
Short term flights provide huge volume. These firms can take an illiquid stock with no volume or movement, have it trading hundreds of millions of shares in one day, and create a huge spike. They do this by “burning” lists - obtaining for example 50,000 to 100,000 names from Google and Yahoo ads and emailing these lists “stock alerts”. Once their position is sold, and they have broken the company’s “frozen status”, the firm stops its flight. Short Term firms charge $50,000 to $100,000 dollars per week in cash. They constantly hound investors via telephone and online, and they look for about $50,000 to $100,000 dollars in stock from 3rd party (non company) to support their flight.
Unless immediately followed up by a midterm flight, this tactic can be construed as a “pump and dump.” After the frenzy of the short term flight dies down, effected issuers stock will return to zero volume, and traders will get frustrated, especially if forced to sell at a loss. The way to avoid this scenario is to immediately launch a midterm flight, (or a code share flight) and have that firm work, with the long term firm always working concurrently in the background.
For this demonstration we will use “air plane flights” and “code share” scenario. Oddly enough, IR campaigns are also called flights.
To that end, just like airplane flights, IR/IA service “flights” range in length. Typically, a short term flight breaks the ice, the midterm flight preserves the new volume, while a long term flight like Mina Mar stays in.
Short term flights provide huge volume. These firms can take an illiquid stock with no volume or movement, have it trading hundreds of millions of shares in one day, and create a huge spike. They do this by “burning” lists - obtaining for example 50,000 to 100,000 names from Google and Yahoo ads and emailing these lists “stock alerts”. Once their position is sold, and they have broken the company’s “frozen status”, the firm stops its flight. Short Term firms charge $50,000 to $100,000 dollars per week in cash. They constantly hound investors via telephone and online, and they look for about $50,000 to $100,000 dollars in stock from 3rd party (non company) to support their flight.
Unless immediately followed up by a midterm flight, this tactic can be construed as a “pump and dump.” After the frenzy of the short term flight dies down, effected issuers stock will return to zero volume, and traders will get frustrated, especially if forced to sell at a loss. The way to avoid this scenario is to immediately launch a midterm flight, (or a code share flight) and have that firm work, with the long term firm always working concurrently in the background.
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