6% Return on Spam Stock Emails

7 comments

You never know the "quality" of the research, but the BBC carries a report on the millions of spam emails touting penny stocks that flood the web. Apparently the spammer earns about 6% and the punter loses around 8% over a mailout. and the conclusion is the obvious "Our analysis shows that spam works," the team wrote. . Humans and greed always go hand in hand.

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

The researchers say that approximately 730 million spam e-mails are sent every week, 15% of which tout stocks. Other estimates of spam volumes are far higher.

The spammers buys low before the emails are sent

Quote:
The team found that a spammer who bought shares the day before starting an e-mail campaign and then sold them the day after could make a return on his or her investment of 4.9%.

"If he or she were to be a particularly effective spammer, returns to this strategy would be roughly 6%," they wrote.

The punter of course loses money

Quote:
On average a victim loses $52.50 for every $1000 invested.

However, real losses would be even greater, the team suggest, because the victim would also have had to have paid fees to buy and sell the shares.

Looks to be a more lucrative way of earning money then AdSense! But you do wonder about people falling for this sort of thing (like the Nigerian scam too.

I hadn't seen an analysis done before.

Comments

If spam wasn't profitable...

no one would do it.

try this...

Quote:
Humans and greed always go hand in hand.

It's Marketing 001... the course taught at 3am over the television. Personally, I've never stayed up that late but I've heard about it ;-)

6% way understates it

That's six percent in a week. If you could increase your money 6% every week, at the end of a year you would have almost 20 times as much money as you had to start with.

Even if, after spamming expenses, it's only 2%, that still nearly triples your money in a year.

You won't find those kind of returns on Wall Street.

The penny stock market has always attracted sleazy operators. Not all penny stocks are scams or dying companies, but enough are that it's a dangerous place to invest. That anyone would put money in a penny stock based on a spam email tip boggles the mind.

Short selling?

I suppose there is no market (or mechanism) for short selling on these stocks, otherwise the contrarian in me would be looing at making money.

LPLE best one ever!

I bought in excess of 1,000,000 shares of LPLE.PK when it was at 0.0025, the very minute markets opened after receiving the spam the night before. I had done tons of research and they did, in fact, own a very good poker domain name htat had been hijacked by an employee. Well, they won the court case, as the spam said, and the stock shot way way up. I sold it at above 0.051.

Since then I've made more money off spam tip offs than any other investment strategy. I mean several-digits percent better. Ever seen the movie Boiler Room? It's a lot like that. Cash out before the market closes the first day of the spam letter and you're almost always safe.

6%?! That must include all the *blatant* scams people buy into that never ever have any reason for real investors to buy up. Look, LPLE dropped from 0.05 to 0.02 just based on my single sell alone. It's really all about who isn't greedy and who is.

I know an israeli spammer

I know an israeli spammer who does this with stocks and shares. He has 10 dedicated servers going all the time. So it must be making money.

The WWW once again the Great Leveler

It used to be that (especially) penny stock (venture capital exchanges) manipulation was the realm of the company or a broker, i.e. press releases or 'club rumours' that xyz-company has some exciting new property to drive up the price followed some months later by a quiet announcement that nothing of value was actually found.

Once again the WWW levels the playing field: now everyone can manipulate stock ;-)

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