Rock Trader Blog: How to Run A Pump and Dump

The OTC markets have slowed down recently so I have been a slightly more cautious with my trading. One stock did catch my eye on my scanner - $MEDL (Mobile Holdings Inc). $MEDL might seem familiar to subscribers of Timothy Sykes newsletter service. I thought this might be a good opportunity for me to teach you guys how to run a Pump and dump. Take notes guys this is about to get interesting.

Step 1: Buy Up a tonne of Shares in the Micro-cap stock of your choice

This is important guys, if you wanna run a pump and dump you have to get in first. I suppose this part must seem pretty obvious, but I think it is very important for people with little experience on pumping stocks. Above shows the Time/Sales history of $MEDL between 9:30AM (Market Open) and 9:49AM EST. For those who may not know, the "Time/Sales" shows the amount of shares traded. It also shows the time at which the trade was executed. You can find this information on most trading platforms. Personally, I use Equity Feed for my Level 2 and Time/sales information. The picture above may not be very clear so I will show you a simple excel screenshot showing the trading executions.

The screenshot above shows the total summation of shares traded in $MEDL between 9:30AM to 9:49AM. The summation was calculated with Microsoft Excel. As you can clearly see, a total of 142300 shares had been traded between 9:30AM to 9:49AM. Thus completes step 1. Note, thousands more shares were purchased minutes after my screenshot. So I cannot be sure exactly when this "guru's" very first or last purchase of $MEDL was, I certainly cannot verify if he was the first, second or third buyer. The time/sales history above shows the "overall" trade history between the specified time.

Step 2: Send a buy "Alert" to your subscribers

Check. Easy part assuming you already have a solid subscriber base. Try to come up with a good reason for them to buy. If you can find a nicely written article online to support your position, that usually helps. I'll give you an example of what a good "alert" should look like.

Above is a great example of a good alert. Notice some key words; "Facebook" - A $152 Billion dollar company. Also observe the potential gains "Microcaps can run 30-50-100%", this is sure to get people interested! Notice how this stock guru - Timothy Sykes - claims to have bought 142500 shares of $MEDL at the time of the alert (9:51 AM). Does that number seem familiar? Refer back to Step 1. The time/sales shows that 142300 shares were purchased by 9:49 AM. This means that most of the shares purchased in $MEDL were purchased by this guru. This is great because you would want maximize your gains from the Pump, if this were one.

Step 3: Dump your shares on Subscribers for Some Solid Profits

So now you've done the hard work. You've purchased the shares, sent out the alerts now its time to make bank! Dump your shares and ring that cash register, you've earned it!

Congratulations! You just made bank on your own subscribers.

Notice the intra-day chart below.

Important to note; Only Tim himself would know his true intention. I am not accusing him of "dumping" shares on subscribers purposely. But having a strong follower base would definitely help create spikes in stocks.

Homework Questions: 1) Would this stock have spiked as quickly as it did if this guru didn't have a large subscriber base?

2) Would the guru have made as much money on this trade without sending out his "alert"?

Well at least people made money off short-selling $MEDL

Hmmm...seems like these guys above think $MEDL was a pump.

Note: As you can see, the above post has been written with some humor in mind. I'm certainly not suggesting anyone performs a "pump and dump". The point of this post is to draw comparisons between this trade and what a "pump and dump" looks like.

I am not accusing this guru of running a pump and dump. However I do think this would be great way to run one if you had a solid subscriber/ follower base. I mean as far as I know, $MEDL DO have a working relationship with Facebook. So that part of the guru's statement was not "false". I do find it quite fascinating that this "guru" thought this rumor could make the stock run, but somehow he seems to be one of the few buyers of the stock before his "alert". This article simply expresses my opinion which is; this trade closely resembles a "Pump and Dump". This is very different from accusing Tim of being a "Pump and Dumper".

Tim himself said in his chat-room "MEDL certainly trades like a pump & dump...". If even he himself observed the similarity between the way MEDL trades and a "pump & dump", he cannot be surprised when someone else sees the same similarity and raises questions about it. Especially considering his history with stock promotion.

Timothy Sykes's History of Stock Promotion: In March of 2012, Michael Goode wrote a very intriguing article about Sykes and stock promotion. The article was titled "On Timothy Sykes becoming a Stock Promoter and Promoting IRYS" The article basically describes how Timothy Sykes was compensated $100,000 to promote IRYS. Thats right, I said it. Timothy Sykes was compensated to promote a stock. Here's an excerpt written by Michael Goode: