On April 2, just as the hype game was getting going, a Motley Fool blogger was asked privately about writing a blog post on Goff.
In addition to wider distribution for their pump, the promoters got the invaluable stamp of legitimacy. Consider this sleight of hand: On April 4, a blog post published on SeekingAlpha stated: "Boutique research firm Murphy Analytics covers the stock with a price target of $4 a share." (That link, from the original article, doesn't work; you can see the report here.)
- Someone -- Goff itself or a third-party promoter -- pays Murphy Analytics to initiate research on Goff.
- A SeekingAlpha blogger cites the Murphy Analytics research (specifically, the $4.00 one-year price target).
- Third-party promoters, in this case PreferredPennyStocks.com, quote from the widely distributed article written by a SeekingAlpha blogger.
- The stock takes off.
- In a little while, probably after a bunch of naive investors or traders have bought, the stock falls back to earth.
The pattern for these penny stock pumps is remarkably consistent. Stock is ignored. Stock is hyped. Stock takes off. Stock tanks, below its pre-hype levels. (The reliability of that pattern is why our contra-penny-stock-spam returns tracker, TMFStockSpam, is currently ranked seventh out of 75,188 players in our CAPS system.)
- Buy nontraditional advertising (advertorials) on legitimate websites like Forbes.com.
- Get readers to click from a Forbes.com article to what seems like another article but is actually a hardly veiled advertisement.
- Use the faux editorial to push folks from the advertorial site to PennyStocks.com.
There's also the fake celebrity endorsement. PennyStocks.com sells a bad product to unwitting investors, and, no surprise, cannot get real endorsements, celebrity or otherwise.
- "@MarkCuban: I wish the Mavs had as many gains as pennystocks.com! I still luv my team though."
- "@realDonaldTrump: I can't believe I listened to Ivanka and signed up to PennyStocks.com."
- "@50Cent: I got shot 9 times but 9 out of 10 picks at pennystocks.com are winnaz!"
- "@jimcramer: Checkout PennyStocks.com's latest stock it's soaring!!!"
Penny stock promoters go to a lot of trouble to appear legitimate, and they sucker in naive, greedy, or unwitting investors (refer again to Goff's rise and fall).