Freyja: Watch Out For This Pump And Dump

Penny stocks often have a hard time getting their name in front of the public. While some hardcore value investors are willing to do extensive research to find these diamonds in the rough, most financial news is dominated by companies in the S&P 500 (INDEXSP:.INX) or other large cap firms. While sometimes a legitimate company will pay for advertising to raise its profile, online financial sites who market companies with little value have started paying for positive analysis to temporarily boost stock prices, which almost inevitably crash back down a few days or weeks later. This type of hype marketing is commonly known as pump-and-dump.

As a case in point,...