Since I have received a few of these in my snail mail recently, and they always tend to get my dander up, I’ve decided to share this one with the readers of my blog.
Click here to see the postcard
I don’t normally get so emotional about junk mail (SPAM is another matter!), but this kind of junk mail gets me hot under the collar, and here’s why:
I’ve had my share of experience with penny stocks a number of years ago, and all of it was not good. Let’s just say I should have listened to the good advice I was given by a few wise people who told me to stay away from penny stocks because the vast majority of them are garbage.
This little junk mail gem is pushing a stock that provides services for people who want to sell things on eBay. It may be a decent company for all I know, but the fact of the matter is that the person or persons behind this junk mail are not doing any favors for anyone except themselves.
It’s real simple if you think about. Why on Earth would someone go through the trouble and expense to send this nifty postcard out to me (and a lot of other people) to make sure so many people knew about this tremendous opportunity?
Is it because they are just generous, caring folks who want nothing more than to help others?
I didn’t think you’d fall for that either. The sad truth of the matter is that the someone behind the creation and distribution of this postcard stands to make a very healthy sum of money if the price of this stock experiences a nice run up.
And what, might you ask, would cause the stock price to go up? Yes, you guessed it. Recipients of this postcard buying into (literally) the hype and buying up shares. Supply and demand. As the supply diminishes demand increases and up she goes!
What’s interesting about this postcard is the stuff they are required to print at the bottom (in small print of course!) to keep themselves out of jail.
If you take the time to read that small print, it pretty much tells you all you need to know.
Here’s what that small print at the bottom of the page says, along with my translation:
‘[Name of company that sent the postcard] is not a registered financial advisory.’
Translation: We have no training in finance or investing. For all you know, we could just be a couple of guys named Vinny and Sal holed up in an abandoned warehouse in Jersey printing this stuff and sending it out to everyone we can think of.
‘The information presented here is not an offer to buy or sell securities.’
Translation: We are not brokers and we are not offering to sell you any stock, but we really, really, really think this stock is going to the moon and we think you should buy it. Quick.
‘Since [Name of company that sent the postcard] has received this information from sources other than the company, there is no representation, warranty or guarantee as to the accuracy of the information contained herein.’
Translation: We didn’t get this information from the company, but we don’t expect you to read this fine print anyway, so what’s the difference? Hell, for all you know, we could have dropped a few hits of acid and hallucinated this whole thing! So even though we want you to think this is the stock pick of the century, in reality, this stock and the company may actually suck, and you could lose your shirt if you invest.
‘[Name of company that sent the postcard] contains forward looking statements, and the company’s actual results may differ materially.’
Translation: We have no idea if this company is about ready to fold up and go out of business tomorrow. But we, after consulting with Madame Jamba (Palm readings, tarot cards and entrail readings. Corner of 124th and 12th. Mon. ‘ Fri., 10:00 a.m. to 3:00 p.m. 555-3192. Free palm readings on Tuesdays!) have determined that the price of this stock will explode soon. Oh yeah, we may have just made all this stuff up, and if you ask the company about it, they may not be willing to let you in on all these cool secrets.
‘Penny stocks are considered to be highly speculative and may be unsuitable for all but very aggressive investors.’
Translation: The vast majority of penny stocks are indeed crap. That is why they are priced so low. Unless you have some good inside info, you probably shouldn’t be messing with them at all.
‘[Name of company that sent the postcard] may hold positions in companies mentioned and may buy or sell at any time, which may affect share price.’
Translation: We are holding a boatload of this crap and as soon as the price runs up nicely, we are going to dump all 10 million shares. That, unfortunately for the chumps who actually buy this stock hoping to make a killing, will cause the price to plummet so fast it will make a shooting star appear slow in comparison.
‘The profile of [Penny stock being promoted] is a paid advertisement by a third party shareholder to [Name of company that sent the postcard] in the amount of two hundred fifty thousand shares of stock that need to be sold to pay for the cost of this advertising.’
Translation: Someone who is also holding a boatload of this stock has given us many shares of stock to send out all these postcards and drum up some buyers for this stock so the share price will rise, and this certain someone can make a fortune. By the way, we’ll do pretty well ourselves!
‘The target price was determined arbitrarily and may fluctuate, please consult a registered financial advisor before making in any decisions.’
Translation: All this stuff about a $15.75 target price is just a bunch of stuff we totally made up in order to get you excited enough to buy this stock. Although we don’t really want you to consult a financial advisor (because you will probably be told that this stock is garbage and you will most likely lose money if you do buy it), the law says we have to say that and we don’t want to go to jail!
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