How to Spot a Pump-and-Dump Before It Burns You
Promotions are engineered to feel urgent. Here are the tells that a 'hot tip' is a distribution event in disguise.
The worst losses in micro-caps rarely come from a business failing slowly. They come from a promotion that manufactures urgency while insiders quietly sell. Learn the pattern and you stop being the exit liquidity.
1. The pressure to act now
"Only 24 hours," "before it's too late," a countdown timer — urgency is the oldest tool in the promoter's kit. Real research never expires in an hour.
2. An untraceable source
Who is actually being paid, and by whom? Legitimate coverage names the issuer, the compensation, and the relationship. If that information is missing, treat the whole thing as an advertisement.
3. Volume that appears from nowhere
A thin stock that suddenly trades 50x its normal volume — right as you're being told to buy — is usually distribution, not discovery.
4. No primary-source support
"Huge news imminent" is not a filing. If the story can't be verified in a press release or a filing, it is a rumour, and rumour-based spikes tend to round-trip.
5. The share structure nobody mentions
A tiny float is marketed as a feature. But check the convertible notes, warrants and authorised shares — the ability to print new shares can erase any squeeze.
This is education, not advice. Always read the Disclosure and do your own research.
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