The Paid Promotion Weekly Wrap Up November 15, 2021
I want to welcome the new paid and free subscribers that have joined this week. A pretty quiet week with only one paid promotion after a wild week last week where we had seven. I joined The Friendly Bear (@reverse_long) on his podcast Friday to discuss my background and thoughts on paid promotions.
It was a lot of fun and I thought he was a great host. I would be open to joining more of these in the future and you might hear my voice more in Twitter Spaces rooms.
I have decided to create the Stock Promotion Hall of Shame. The list consists of prior paid stock promotions going back at least three months and who have been on relatively good behavior.
There was one paid promotion that I was tracking for the week in Biotricity $BTCY. The company is a target of what seems a never ending sponsored promotion. I wrote about it on November 10, 2021 for paid subscribers.
It was definitely a step backwards for many of the paid promotions last week. $GSPT lead the losers down 20%+ for the week. The other losers were $LGIQ, $PIXY, $IFBD, and $MDGS. Outperformers included $URYL, $KWEMF, $RGDCF, and $BTCY.
Paid Promotion Thoughts:
There were some really interesting questions that I was asked on the podcast and a few that weren’t asked, which I wanted to cover.
1) Why do you think paid newsletters are sent out?
There are a few reasons why I believe these promotions are being ran:
Companies have been sold on them by an IR or PR professional to try to build new awareness for their company. I think adding a dedicated IR executive is a much better answer for the long term instead of sending a paid promotion operator a five or six figure wire transfer for a few days of email and text message blasts to retail traders.
A company is prepping to do a capital raise and needs to get the stock price higher and/or liquidity for an at the market program to be conducted.
Legacy convertible debt is being converted into common shares and resold into the market.
2) Why do you think it is important for investors to know the stocks are getting pumped through newsletters?
When managing my portfolio, I am very interested why my investments are moving higher or lower. If my stock is moving lower I want to know if there is a fundamental problem, which someone else has an information edge that I do not have and there are more lower sessions to come when the information becomes public. If it might just be broad market related, rotation or ETF related with no change in the company fundamentals, I will usually add to my position. If the stock is moving higher I want to know if it is from a new product, excellent operating results, or a new investor might be building a position. If I know its from a paid stock promotion, I will know the higher move is likely short term. I usually write covered calls against my common position when I conclude the move higher is just short term. I don’t remember the last time a position of mine was subject to paid stock promotion.
3) Are investors paying for the pump so that they can dump their shares? Are insider shares getting unlocked and one of the insiders pays for the pump?
During my time writing the Paid Promotion Newsletter there aren’t any instances of paid promotions being ran with major insider selling on the backs of it. I know there is a $BTCY Director selling some stock the last two months, but it is not hundreds of thousands or millions of shares being sold by directors or executives as some might believe.
Be advised I am receiving teasers for a new paid stock promotion by two different promoters to be issued at 9:30am EST tomorrow Tuesday November 16, 2021. I will have coverage out for paid subscribers shortly after the promotion emails are received.
Thank you everyone for reading and the support.