|
Home::Mark Crisp
Investor Awareness Campaigns: A Look at the Other Side
Author : Christopher Smith
So you've signed up for a newsletter which promises to give you great stocks picks. Trust their stock picks and you wont miss out on the latest stock market darling. You dont want to miss out on another company who's shares have moved up over 100%. Follow their advice and you will never have to do your own due diligence again!
If only it were that simple!
Stock promotion has been around for decades and when done for the right reasons, can provide potential investors with an opportunity to get in on the ground floor of an up and coming company. Unfortunately, like all good things, there are just enough bad seeds out there to give the whole investor awareness industry a bad name. Far too many investors have been caught in a game of pump and dump. Perhaps a look from the investor awareness side of things will help you avoid being caught.
Why do companies hire investor awareness firms?
Many small businesses are great at what they do. Many have found their own niche and continue to build their company. The problem is, they have difficulties getting the word out about their success story. As such, with no new investors, the share price remain stagnant, and long time insiders are unable to either raise money to finance growth, or to cash out some of their hard earned equity.
An investor awareness firm can help publicly traded companies get the story out to newsletter subscribers. With the facts in hand, these subscribers may decide to turn into investors. The more investors out there, the more opportunity for everyone to make money.
What should you, the subscriber, be aware of?
a) Investor awareness firms are paid a fee. It costs money to generate campaigns, press releases, newspaper articles etc, and the fee helps to compensate for these expenses, as well as pay for the firms time in creating the campaign. These firms are either paid out in cash, or if the investor awareness firm feels strongly about the future of the company, they may become shareholders. If the share price moves up, their compensation moves up also. Quite the incentive to do a great job for the company.
Its recommended that if the newsletter you subscribe to receives shares for their compensation, find out if these are restricted shares, or free trading shares. If they are free trading shares, you may end up buying their shares as the firm sells to cover expenses. Not all firms sell immediately, so its best to make sure. If the shares are restricted, its a safe bet that you and the firm are in it together for at least the life of the campaign or until the shares become unrestricted.
Most campaigns last 1-3 months, but many firms in fact provide coverage past that point.
b) Watch for insider selling. While there is nothing wrong with an insider monetizing their investment, if you see a substantial number of shares being sold at the same time as the campaign is going on, you may find yourself buying shares from the insiders and be left holding them for awhile.
Remember, if the company outlook is so bright, insiders will know better than you, and will hold knowing they will eventually get a much, much higher price.
c) Pump and Dump - its not just insiders you have to worry about. Its in the best interest of a company who has been compensated with shares in the company to see the share price move higher. Watch for an overly bullish spin on stocks that are being promoted by those who have received shares in the company. Find out if the firm has to hold the shares for a period of time, or are they able to sell the shares anytime. If there is a restriction placed on the sale of shares, you stand a better chance of making money on an even playing field.
Most credible newsletters will provide their subscribers with the facts and let the information speak for itself. You dont need to spin a good story: it spins itself!
d) Do your own due diligence - is this company making money? Do they have a product that will be in demand in the future? Is the company creating new products? Investing in penny stocks is no different than investing in large caps; only the risk is different. Ask the questions and only invest when you feel 100% behind the company.
Don't automatically assume that just because an investor awareness firm accepts shares for compensation means that they are part of a pump and dump scenario. Here are a couple of things to keep in mind from the perspective of the IA firm as to why they might accept shares over cash.
1. Chance for a higher payoff. If the campaign is successful, they stand to make more money. Many of the owners of these firms are also investors. If the future looks good for the company, why wouldnt they want a part of that future?
2. It may have been the only way to make the deal. The investor awareness firm will do its own due diligence before deciding that the deal is worth it. Its their money on the line. For many publicly traded companies, they may not have enough funds available to pay $50 000 or more for a high profile campaign. They may however have enough shares on hand. Once the share price is high enough, they can go after financing, providing the company with cash to finance further growth.
Can you make money when a stock is being promoted? Of course, and many investors make a lot of money thanks to the attraction of new investors. The key is to find the companies who are geniunely attempting to increase shareholder value versus trying to line their own pockets at the expense of shareholders. Only your due diligence can help you do that. Penny stocks can provide investors with a high return, however, it takes more due diligence than luck to jump onboard the right one.
Article Source: http://www.articledashboard.com
smallcap360.com is a investor awareness firm who brings investors and publicly traded companies together through stock profile awareness campaigns.
Spam emails More free articles Related articles
|
More related feeds |
investor awareness campaigns a look at the other side
so you've signed up for a newsletter which promises to give you great stocks picks. trust their stock picks and you wont miss out on the latest stock market darling. you dont want to miss out on another company who's shares have moved ...investor awareness campaigns: a look at the other side
far too many investors have been caught in a game of pump and dump. perhaps a look from the investor awareness side of things will help you avoid being caught. why do companies hire investor awareness firms? ... European Journal of Archaeology » Blog Archive » Maltese ...
However, in this field, as in other fields, there is no room for neo-colonial attitudes, from either side. Local institutions should take, and be seen to be taking, equal if not leading roles. After all, it is they that are answerable ... California » Blog Archive » The Spiritual Dimensions of Obama’s ...
“admit the possibility that the other side might sometimes have point.” He has the capacity to listen to the truth on all sides, and find a higher truth that includes us all. Obama doesn’t promise to do everything for us, ... FRUSTRATION SETS IN FOR COMMANDCLEM INVESTMENT SCHEME’s INVESTORS ...
Filed under: BusinessNEWS | Tagged: advertisement jingles, akwa ibom high court, awareness campaign, commdandclem, court, crude oil tanks, dollar, entitlements, escaping poverty, fortune&weekly, frustration, investment, investors, ... Political Perceptions : Political Wisdom: Tom Daschle's Rave Reviews
It has been expanded to include columns by the Journal’s Gerald F. Seib and other campaign-watchers who will be contributing fresh columns daily. And of course, the daily roundup of political analysis on the Web that began it all isn’t ... Michelle Malkin » Where in the world
Being somewhat religious, I take comfort in this biblical fact–it helps me keep my sanity when members of The Other Side chime in. #14. On November 19th, 2008 at 5:41 pm, zorro said:. Rats! I missed you. Hope Ed or Allah at Hot Air will ... Climate Progress » Blog Archive » “Oh My God, They Admitted It”
Even if you think you need to keep up with the disinformation the other side is spreading, the Heritage blog has misleading headlines and humorlous content with remarkably little original analysis given that it is perhaps the premier ... The Osterley Times: Reports: Passing Universal Healthcare Could ...
Passing Obamacare would be like performing exactly the opposite function of turning people into investors. Whereas the Investor Class is more conservative than the rest of America, creating the Obamacare Class would pull America to the ... A Palin Recap for Posterity – RIP Or, Palin for a New Political ...
albeit with a side trip to a governors’ conference that shined a little too much light on this woman and generally a little too much other post-election attention on the Republican vice presidential candidate. But, we seem to finally be ...
|
|
|
