Agoracom

Zac Bisonette has a great article on bloggingstocks about pump ‘n dump promoters using YouTube as another avenue for stock promotion. The most imporant, however, is that tactics such as e-mail spam, direct mail and telephone boiler rooms are no match for some simple due diligence - check the SEC litigation database by running names of companies, officers and directors through it. In just a couple of minutes, you’ll go a long way towards determining whether a possible investment is just another scam.

By the way, here is the “AGORACOM” search result under SEC litigation. One of the rare instances I can be proud of seeing “No documents matched your query.”

Regards,
George

P.S. YouTube can be used for legitimate stock marketing purposes. AGORACOM will be unveiling a YouTube profile just in time for PDAC 2007 and posting interviews with analysts, executives and attendees for the benefit of those who can’t make it to the biggest mining conference in the world

The Globe & Mail reported a story yesterday that the OSC is considering setting up a scam squad to battle pump n’ dump boiler rooms and e-mail spammers.  We at AGORACOM would applaud any such initiative by the OSC.  E-mail spam is at all-time highs now, making up close to 20% of all spam we receive on a daily basis.

An annoyance to most people, stock spam actually hurts the small-cap industry because it paints the entire industry as one of pump n’ dumpers that need to spam in order to promote their stocks.  We all know differently and that this is the raison d’etre of AGORACOM - but penalizing companies and unscrupulous promoters is good for everyone.

Will the OSC go through with it? 

In an interview following his speech, Mr. Wilson said the proposal for the scam unit came from the commission’s enforcement division and hasn’t been approved yet, but will be considered in coming weeks as the OSC sets its budget for the coming year. He said he doesn’t know how much such a unit would cost, but said it would be assessed on a cost-benefit basis.

I sure hope they take into account the intangible side of this equation.

Best,
George

Today’s announcement by Patriot Scientific is the very reason I started this blog recently.  Specifically, a great example of a real OTCBB company, as opposed to the junk we are forced to hear about via stock spam campaigns.

Patriot announced that it will issue a cash dividend of $0.02 per share of common stock for shareholders and qualified warrant holders of record as of March 6, 2007. The dividend is payable April 9, 2007.  The news drove PTSC up 29% on about 5.5 million shares of volume.  Even if you bought PTSC at the close of trading today, that still amounts to a 2.6% yield.

Comments from Chairman and CEO David Pohl indicate this probably won’t be the last dividend payment to investors:

“We want our shareholders to participate in our share of the revenues generated by our jointly owned MMP Patent Portfolio,” said David Pohl, chairman and CEO of Patriot Scientific Corporation. “In furtherance of this philosophy, our board of directors has now adopted a policy of paying a dividend every six months, subject each time to a determination by the board that payment of a dividend would then be reasonable and prudent in light of the financial condition of the company, other possible applications of the company’s available resources, and relevant business considerations,” Pohl stated.

Congratulations to Patriot Scientific investors and - more importantly - thanks for demonstrating to the world that great quality can be found in the small and micro-cap world.

Best,
George

David Feldman of the Reverse Merger Blog has some great pointers about shell companies that suddenly start to trade heavy volumes on little or no news.  He spefically mentiones the following 3 time periods:

• Before Any Announcement
• After Announcing an LOI or Agreement
• After Closing A Merger

If you’ve ever been left holding the bag, or don’t ever want to be left holding the bag, take 5 minutes to review his article.

Regards,
George
 

Small-cap uranium deals continue to see massive gains. Today’s latest star is Majescor Resources that gained more than 48% on more than 12,000,000 shares traded.  That is not a typo.  Here is the Yahoo Finance Canada summary:

http://ca.finance.yahoo.com/q?s=MAJ.V

The PDAC Conference (March 4-7 in Toronto) is the biggest mining conference in the world and will no doubt display some great fireworks displays in the Uranium space.

Regards,
George

Good morning. Despite vast sources of education and research on the web, staggering amounts of money are being invested and lost in scam stocks. This space is a great one to invest in and profit from if you use some common sense techniques, however, many investors are still treating investments like the craps table at Bellagio and just laying down bets without much thinking involved. My anecdotal research tells me much of this can be attributed to just plain laziness.

As such, here are 7 sure fire techniques to help you spot and avoid a scam stock in under 5 minutes:

1. Filing Financial Statements - Good companies file quarterly and annual financial statements with the SEC (www.Edgar.com ) or OSC (www.SEDAR.com). If you have found a company that doesn’t file, run.
2. Bad People - People who run pump and dump scams usually have a history of doing so. Take 5 minutes to Google officers and directors of any small/micro you are planning to invest in. Add on terms such as “fine” “penalty” “complaint” to improve the result. If someone pops up, run.
3. Commercial Acceptance - If a company is achieving $1,000,000 in annualized revenues, then they have achieved commercial acceptance and stand a good chance of creating a good company. Less than that and they haven’t proven themselves yet. It doesn’t mean the company is necessarily a scam but it does mean you are running the risk they never get sales off the ground.
4. Stock Spam - If the company is engaged in stock spam, then chances are you have just run into a pump and dump. Check sites such as SpamNation which reports on stock spam on a daily basis. One caveat, there are several occasions when companies are unknowingly spammed by investors who have taken a position in the open market and trying to promote it via spam. Check and see if the company has issued a public statement disavowing any connection to it.
5. Sniff Test - A big part of investing in this space is common sense. This is due to the fact very little media and analyst coverage exists in the space for investors to rely on. As such, you need to run the following sniff tests. First, if a company is introducing a “revolutionary” product, is it something you would buy and do they have the cash in the bank to market their product? If the company is introducing a better mouse trap, will they be able to carve out market share from existing players? On this latter point, refer to point #3 above. If they have achieved commercial acceptance, than they have a good chance of multiplying their business.
6. Market Capitalization - This is a simple one. Multiply the company’s outstanding shares by its share price and you get the company’s market valuation. If it is $100 million with only $100,000 in sales, run.
7. Spiking Stock Chart - If the company has a chart that looks like a hockey stick over a short period of time (i.e. less than 30 days) on dubious news, you’ve run into a stock promotion and will be left holding the bag. The caveat here is for companies that have achieved that stock run on good, real news (big customer order, big discovery, etc.)

The small/micro-cap space is a great place to make phenomenal gains on up and coming companies. Use my 7 tips and you should prosper for a long time to come.

Best,
George

Good morning to you all. Technorati has a brand new feature called “WTF?”, which stand for “Where’s The Fire”. In a nutshell, members get to post about items that people are searching for - so I contributed a post called Junior Gold and Uranium Stocks Making Dot-Com Gains Thanks To Metals Prices . It is more of an overview but I used the opportunity to help spread the word about this sector and link readers to our clients here on AGORACOM.

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With gold and uranium prices sitting at or near all-time highs, junior gold and uranium stocks are showing gains we have not seen since the dot-com days.The difference? Whereas the dot-com boom was built on companies that had no real products and revenues, there is no arguing the demand for gold and uranium in this world. As such, the higher the prices, the higher the underlying stocks go.

To find out more, here are some good sources of information.

http://www.uraniumceoblog.com
http://www.agoracom.com/market… (use the filter to only see metals and mining co’s)

Hope this was helpful. If so, please drop by my blog which just went live a few days ago.

Regards, George