Hidden hands behind penny stock surge (The Edge)

Special Report: Hidden hands behind penny stock surge 

The Edge Malaysia September 30, 2020

This article first appeared in The Edge Malaysia Weekly, on September 21, 2020 - September 27, 2020.

ASTUTE market observers would have noticed on the local bourse a group of individuals, supposedly acting in concert, who have amassed shares in more than 20 publicly traded companies. These companies — linked via shareholding and directorships — are often on the most actively traded list, with huge, fluctuating share prices. “It (the companies) is all linked to the same person; usually, the most actively traded list on a daily basis involves these counters,” one source says when asked which are the companies that are linked. 

However, research by The Edge (see chart on the 21 companies) indicates that while other businessmen have surfaced, the individual said to be in control of the group of companies is not officially onboard or present as a shareholder.   “This [his not surfacing] could be due to several issues,” another source adds. 

It is also telling that nine of the 21 companies mentioned — 

• AT Systemization Bhd, 
• MLabs Systems Bhd, 
• Focus Dynamics Group Bhd, 
• mTouche Technology Bhd, 
• Fintec Global Bhd, 
• XOX Bhd, 
• M3Technologies (Asia) Bhd and 
• NetX Holdings Bhd 

— have their principal place of business, head office, business office or corporate office in Menara Lien Hoe, near Tropicana Golf Country Resort in Petaling Jaya. 

On its website, Lambo Group Bhd states that its address is at Menara Lien Hoe, even though the address in its annual report is in Old Klang Road in Kuala Lumpur. 

In 2006, Lien Hoe Corp Bhd sold Lien Hoe Tower Sdn Bhd, which owns Menara Lien Hoe, to privately held E-Globalfocus Sdn Bhd for RM1 and the assumption of RM43 million in debts. Meanwhile, E-Globalfocus was 68%-controlled by Cubes Innovative Sdn Bhd, a company 99%-controlled by Chuah Hock Soon. 

Chuah and businessman Datuk Kenneth Vun @ Vun Yun Lun were charged with four others in July 2014 for allegedly manipulating DVM Technology Bhd shares in March 2006. 

Vun has had several issues with the Securities Commission Malaysia and, in 2009, had to restitute RM2.496 million — being the amount of company funds that he had caused to be misused for his personal benefit, according to the regulator — to his then flagship FTEC Resources Bhd. Since FTEC — which morphed into Tecasia Bhd and later Mangotone Bhd — was delisted, 

Vun has had little direct presence in the market. However, Vun’s two sisters, Carol Vun On Nei and Grace Vun Siaw Nei, hold stakes of 3.64% and 0.67% respectively in Xidelang Holdings Ltd. 

Fragmented shareholding 

While Fintec Global seems to be a prominent company at the centre of the maze, its shareholding is fragmented, with several blocks of shares parked under Sanston Financial Group Ltd. In several of the 21 companies on the list, Sanston Financial is present in the shareholding list. Other companies that surface as shareholders in these list of companies include Global Prime Partners Ltd and Cita Realiti Sdn Bhd, a private company wholly-owned by one Kamarudin Khalil. Other shareholders, albeit usually holding small stakes, among the 21 companies include Datuk Jacky Pang Chow Huat — who, apart from a 11.84% stake in Sanichi Technology Bhd — has small stakes in DGB Asia Bhd, Focus Dynamics, MNC Wireless Bhd and Xidelang. Pang is also a director in Sanichi Technology.

Meanwhile, businessman Mak Siew Wei has 23.4% in AT Systemization, 17.07% in Green Ocean Corp Bhd and small stakes in Focus Dynamics and Xidelang. He is also a director at AT Systemization, Green Ocean and Saudee Group Bhd. Datuk Eddie Chai Woon Chet recently acquired a 62.37% stake in restaurant operator Oversea Enterprise Bhd, and has a 6.71% shareholding in Anzo Holdings Bhd, where he is managing director and has a board position in M3Technologies (Asia). Another name frequently seen is Datuk Kua Khai Shyuan, who, besides a 5.9% stake in mTouche Technology, has small shareholdings in Focus Dynamics, PDZ Holdings Bhd and Sanichi Technology, and has board seats on Trive Property Bhd, DGB Asia and MNC Wireless. Former Umno treasurer and former Bank Simpanan Nasional Bhd chairman Datuk Abdul Azim Mohd Zabidi surfaces as a director in four of the companies — Fintec Global, DGB Asia, Anzo and XOX. 

Most of the companies are loss-making and small in terms of market capitalisation, with the exception of Focus Dynamics, which has a market value exceeding RM5 billion. Nevertheless, Focus Dynamics, which is involved in operating food and beverage outlets, seems to be the star performer, with its stock price hitting a multiple-year high of RM2.64 recently on Sept 17, despite mustering a meagre RM3.08 million in net profit from RM20.72 million in revenue for its six months ended June this year. Year to date, Focus Dynamics stock has gained about 400%. 

Irrational exuberance 

Trading volume on most of the 21 companies is generally high, and many have shown unexplainable strong gains over the past few months. 

• For instance, Saudee’s stock hit a low of eight sen on March 17, and picked up momentum in June to hit a 52-week high of 67 sen on Aug 13, gaining more than 300%. For its nine months ended April this year, Saudee, whose mainstay is in frozen food and poultry, suffered a net loss of RM27.78 million from RM57.61 million in revenue. Last Friday, Saudee closed at 48 sen, translating into a market capitalisation of RM77.3 million. 
• If you are impressed with Saudee’s gains, Anzo — a loss-making company that has a business in timber products — gained more than 1,000% from mid-May to hit a high of 26 sen in July. Anzo closed at 11.5 sen last Friday, giving it a market capitalization of RM102.7 million. 

There are several companies on the list that have shown similar patterns. 

• XOX, which is involved in cellular telecommunication services, gained more than 430% from mid-July to hit a high of 39.5 sen at end-August. In mid-March this year, XOX was trading at one sen. The stock closed last Friday at 19.5 sen, translating into a market value of RM562.8 million.
• Ailing shipping company PDZ’s stock was trading at one sen in mid-March, but at end-June, it gained more than 500% to 32.5 sen in mid-July. For a company mired in law suits and a significant dearth of shipping assets, PDZ’s meteoric rise is surprising to many. PDZ ended last Friday at 10 sen, giving it a value of RM89.4 million. 
• Similarly, Sanichi Technology, which is in precision moulding, saw a sudden surge in trading volume at end-May, with its stock spiking more than 150% to hit a high of 12.5 sen on June 2, after which it tapered off. 

While the peaks may be enticing to punters, the change in fortune, with counters falling to their troughs, can be a deterrent. 

• mTouche Technology, which has a wireless network and mobile messaging business, saw its stock crash from a high of 20.5 sen on Feb 20 this year to a low of 5.5 sen on May 12. 
• DGB Asia, a tracking solutions company, was trading at 19.5 sen in the early part of November last year, but by mid-March, it had shed most of its value to close at 1.5 sen on March 19. 

It is also noteworthy that companies such as Water Beaute World Bhd and WBW Global Sdn Bhd, have 1.02% and 0.42% respectively in Trive Property. These two companies were involved in get-rich-quick and fake online investment schemes. Both these companies were reported in the past to have stakes in XOX, while WBW Global also had a substantial stake in Anzo Holdings.

https://www.theedgemarkets.com/article/special-report-hidden-hands-behind-penny-stock-surge?type=malaysia

Comment:

Fine piece of investigative financial investigation and journalism.  Thanks to Edge.

One of the biggest dangers with Investing is Overconfidence

Quote:   

Re: uyafr selection October 2010 batch
« Reply #45 on: October 27, 2010, 10:16:15 AM »
Reply with quoteQuote
Quote from: smartinvestor on October 27, 2010, 10:09:42 AM
Agree with Uyfar...
GenY...please tell the MANY company that also doing well too...
DIGI? KPJ? Genting?
Here is the place we share information and earn $$$ together

yep, do u know how much is DIGI, KPJ Gentings ? hehehe if suddenly those counter drop.. kena kaw kaw, if go up.. the most 5-10%

BUT LCTH, I dont see how it can drop much, but if go up... even if go up 100% it is still cheap and good. So think for yourself, is it worth risking on those counter already too high up or buy a counter which is still rock bottom and rock solid.

http://www.investlah.com/forum/index.php/topic,11510.msg195753.html#msg195753


The above was a post in October 2010 in a blog that I participate.

Here are the 5 Years charts of DIGI, KPJ, Gentings and LCTH performance.



Digi Share Price
Oct 2010  RM 2.50
July 2013  RM 4.70
Capital Gain 88%




KPJ  Share Price
Oct 2010  RM 3.80
July 2013  RM 6.50
Capital Gain 71%



Genting Share Price
Oct 2010  RM 10.50
July 2013 RM 10.50
Capital Gain 0%

versus



LCTH Share Price
Oct 2010  RM 0.28
July 2013  RM 0.18
Capital Loss  - 35.7%

From October 2010 to July 2013:
1.  The prices of the shares of Digi, KPJ have performed very well.
2.  Genting share price remained relatively unchanged over this period.
3.  The share price of LCTH has tanked significantly.


Questions I pose:
1.  Are higher priced stocks more risky than penny shares?
2.  Are higher priced stocks more risky because they have a longer way to drop?
3.  Are penny shares less risky because should their prices correct, the drop will be less?
4.  Why are higher priced stocks priced such, and why are penny stocks priced such?
5.  What are the fears that kept this "investor" away from Digi, KPJ and Genting?  Are these fears rational or irrational?
6.  What drives his enthusiasm to penny stocks?  Greed?  Ability?  Confidence?  Past gains?   Are these emotions rational or irrational?
7.  What single characteristic, if any, distinguishes the gains in Digi, KPJ and no loss in Genting, compared with LCTH?


What lessons can we derive from the above observations?
Please feel free to post your comments.

How Penny Stocks work

Spotting Sharks Among Penny Stocks

October 30 2012

For every publicly traded corporations with market capitalization in the hundreds of millions and billions, there are thousands of smaller companies with much more modest market caps. Because these companies have smaller operations and more risks, they trade at only a fraction of the price of their much larger counterparts. These are, of course, the infamous penny stocks. This article will look at some of the dangers that lurk in penny stocks trading.

The Myth Of Evolution
One thing that keeps people dabbling in penny stocks is the belief that these corporations will evolve into firms that will become much like their larger counterparts. This has happened, but not as regularly as penny stock proponents would have you believe.

Many public firms simply defer going public until they have grown large enough for it to be worthwhile. Until that time, they will usually raise money through private investors or corporate loans along with their regular operations. Generally, these companies do not need an initial public offering (IPO) to fund an expansion. The larger a company becomes, the more practical it is to raise funds through a public offering, because although equity is seen as a relatively more expensive form of financing, it often becomes necessary for larger companies.

Good Intentions?
If a company is offering its stock at the penny level, it is usually for one of the following reasons. First, the company may be on the cusp of a large expenditure, and it believes that the money raised by an IPO will be enough to finance it. Second, the company may have reached the apex of its growth and it wants to change its tax structure or disperse the profits.

There are also less noble reasons for a company to go through an IPO process when it is still quite small. Sometimes a company is talked into an overpriced and overhyped IPO by penny stock brokerage firms that want to make a quick dollar from unwary investors. An IPO could also be an attempt by the company's owners to offload their ownership to investors because they see little promise in the company's future.

Oranges and Apples
It is important to remember that within penny stocks, there is a wide range of companies. You can find an oil prospecting company with a recognizable corporate structure right next to a family-run organic farm that specializes in cabbage. Some of those companies may allow investors to have a say in who is running the show, and some may be one-man operations that suffer terribly when the founder retires or dies. And while larger companies generally strive to please investors, penny stock companies may pay no mind to their investors at all.

The Bait
Not many value investors spend their time in penny stocks. Although a well-managed penny stock company may see good returns over the years, it is much more difficult to get full disclosure and the rules that apply to penny stocks are much looser. These companies do not face the same standards as large firms, are required to file with the Securities and Exchange Commission (SEC) less frequently and have limited requirements for listing.

What lures investors into the oceans of penny stocks is the dream of buying 1,000 shares for $0.50 and then later selling them for $5 or some similarly lucrative transaction. Unfortunately, that ocean is full of sharks that know exactly what you're looking for.

The Bite
Some people think that brokerage firms that specialize in penny stocks are often just a step up from a guy with a bat waiting to rob someone in a dark alley. Successful companies don't need people to cold call and talk up their stocks. Penny stockbrokers engage in a mixture of cold calling and targeted sells. They often have a collection of leads, people who have had a history of buying into poor investments over the phone or who have given their information to someone who turned around and sold it.

Using this list, the stockbrokers will call prospective marks and introduce themselves. Soon after, be it a day or a week, they will call again with a chance to get in on the ground floor of a stock that is set to rocket away. This will prove to be a stock that they have been pumping up in message boards, emails, newsletters, etc. Then, when investors buy in, the firm and its partners get out and leave a gaping wound in the investors' portfolios. These firms are also known to take their pound of flesh in the form of high commissions. 

These firms, and the brokers that support them, will often use techniques such as advertising in mass emails. You may see mailings in your account about the latest greatest stock that is set to return 1,000%. In all cases, without doubt, it is a penny stock, and one you probably should avoid. 

Multiple Victims
Sometimes the companies involved in these swindles are complicit, but even honest companies find their stocks targeted by unscrupulous penny stockbrokers. These sharks may take an innocent company that has had a few good years and make false publications or claims that "insiders" have said it is poised for a leap. When the brokers pull out, they have not only ripped off investors but also ruined the reputation of an otherwise stalwart company.

Blood in the Water
If an investor has the poor judgment to get involved with penny stockbrokers, he or she may find a permanent target painted on his or her back. Because of the profits and commissions involved, these brokers will persist with their calls until they get your check - after that the calls will dry up and the number may even change. Many of the sharks in penny stock brokerages have securities violations on their records, but it is their ability to sell that keeps other firms hiring them - and it is dishonest profits that keep penny stock brokerage firms in business.

The Bottom Line
By and large, attempts to regulate penny stocks have been thwarted. The low prices make them ideal for manipulation because a few false cents per share can mean thousands if you hold most of the shares. The internet has also offered a whole new medium by which to cheat investors. For every site that exposes penny stock fraud, there are hundreds of sites espousing one undiscovered treasure or another. The best way to avoid getting swindled in the penny stocks is just to stay out of the water - if you don't swim, you won't be bitten.

Read more: http://www.investopedia.com/articles/stocks/07/penny_stocks.asp#ixzz2AmZW70kj

The impact of spam that touts stocks upon the trading activity of those stocks . Spam Works!

Spam Works: Evidence from Stock Touts and Corresponding Market Activity

Laura Frieder 

Purdue University - Krannert School of Management

Jonathan Zittrain 

Harvard Law School and Kennedy School; Harvard School of Engineering and Applied Sciences; Berkman Center for Internet & Society
March 14, 2007

Berkman Center Research Publication No. 2006-11
Harvard Public Law Working Paper No. 135
Oxford Legal Studies Research Paper No. 43/2006 
Abstract:      
We assess the impact of spam that touts stocks upon the trading activity of those stocks and sketch how profitable such spamming might be for spammers and how harmful it is to those who heed advice in stock-touting e-mails. We find convincing evidence that stock prices are being manipulated through spam. We suggest that the effectiveness of spammed stock touting calls into question prevailing models of securities regulation that rely principally on the proper labeling of information and disclosure of conflicts of interest as means of protecting consumers, and we propose several regulatory and industry interventions.

-  Based on a large sample of touted stocks listed on the Pink Sheets quotation system and a large sample of spam emails touting stocks, we find that stocks experience a significantly positive return on days prior to heavy touting via spam. 

-  Volume of trading responds positively and significantly to heavy touting.  For a stock that is touted at some point during our sample period, the probability of it being the most actively traded stock in our sample jumps from 4% on a day when there is no touting activity to 70% on a day when there is touting activity. 

-  Returns in the days following touting are significantly negative. The evidence accords with a hypothesis that spammers "buy low and spam high," purchasing penny stocks with comparatively low liquidity, then touting them - perhaps immediately after an independently occurring upward tick in price, or after having caused the uptick themselves by engaging in preparatory purchasing - in order to increase or maintain trading activity and price enough to unload their positions at a profit. 

-  We find that prolific spamming greatly affects the trading volume of a targeted stock, drumming up buyers to prevent the spammer's initial selling from depressing the stock's price. 

-  Subsequent selling by the spammer (or others) while this buying pressure subsides results in negative returns following touting. Before brokerage fees, the average investor who buys a stock on the day it is most heavily touted and sells it 2 days after the touting ends will lose close to 5.5%. 

-  For those touted stocks with above-average levels of touting, a spammer who buys on the day before unleashing touts and sells on the day his or her touting is the heaviest, on average, will earn 4.29% before transaction costs. The underlying data and interactive charts showing price and volume changes are also made available.

Number of Pages in PDF File: 44

Keywords: spam, stock, tout, markets, e-mail, Internet, cyberlaw, SEC, unsolicited, commercial, manipulation, timing, consumer protection, pink sheets, efficiency

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=920553

Playing Penny Stocks (Chan dumps Ariantec and Metronic shares.)

Playing Penny Stocks

At first glance, penny stocks seem like a great idea. With as little as $100, you can get a lot more shares in a penny stock than a blue chip that might cost $50 a share. And, if the two blue chip shares you bought went up $1 you'd only make $2, whereas if 100 shares of a $1 stock went up a $1 you would double your money.

Unfortunately, what penny stocks offer in position size and potential profitability has to measure against the volatility that they face. 

Penny stocks can shoot up. It happens all the time - but they can also crash in moments, and are exceptionally vulnerable to manipulation and illiquidity. 

Getting solid information on penny stocks can also be difficult, making them a poor choice for an investor who is still learning.

Related: 

The Lowdown On Penny Stocks.

Chan dumps Ariantec and Metronic shares

Ariantec Global

Stock Market Scams

As an investor, you must be aware of the stock market scams. The following are two of the most common stock scams.

1. The Pump and Dump
The pump and dump is one of the easiest and most common ways of taking money away from unsuspecting investors. Although it is illegal, the use of the pump and dump has actually increased because the Internet has made it possible to reach millions more people.

Here’s how the pump and dump works:
First, company insiders try to convince outsiders to buy a stock, usually the stock of a small over-the-counter company (Penny stocks). Investors are led to believe that this is a “once-in-a-lifetime” opportunity to make a small fortune. The fraudsters will pump up interest in the stock by sending messages through Internet chat rooms, or posting overly optimistic press releases.

Before the Internet, pump and dumpers used to call people on the telephone (often called Boiler Rooms). The idea is to artificially pump up the price of a stock by spreading false news. The stock price rises because of increased buying and speculation, not because of anything positive happening in the company.

As the stock goes higher, those with inside knowledge are prepared for the “dump.” As more people buy shares of the stock, the insiders sell all their shares for a huge profit. Eventually, the truth comes out, and the stock price falls as more people sell. Guess who is left holding the shares of the now nearly worthless stock? You guessed it – the unsuspecting investors who bought into the hype. They probably thought the price could go higher, so they never sold their shares.




The pump and dump is one of the oldest and most effective scams. Usually, pump and dumps are used on small stocks selling below $1.00 a share because it is easier for pump-and-dumpers to manipulate the stock price with smaller stocks.



2. Insider Trading
There are actually two types of insider trading: legal and illegal.

Legal insider trading is that done by company employees (insiders) who file proper paperwork with the SEC before buying and selling shares in their company. These documents are available for viewing on the SEC Web site.

On the other hand, illegal insider trading occurs when company employees buy and sell stocks based on information that is not known to the public. For example, it’s illegal for the managers of XYZ Company to buy additional shares of stock in the company if they know that a revolutionary new product is about to be released. It’s even illegal for you to buy shares of stock in that situation if company insiders (perhaps your neighbor) tell you about it.

Do you think insider trading is common?
It certainly is. It occurs a lot more often than many people think. Every once in a while the SEC catches a celebrity just to make a point that it’s watching. Nevertheless, it’s my estimate that thousands of insiders are using information gleaned from the companies they work for to make profitable transactions. It’s an open secret that those in the know are trading stocks on inside information.

Recent Stock Scams

What are stock scams?

Over the past few years there have been many stock scams taking place that cheated investors out of millions of dollars. Some companies have put millions of dollars on the books as revenue that was really fictitious. Other companies like Enron used misleading accounting tactics to trick their investors into thinking that their company was worth much more than it really was. As a result, it turned a stock worth more than $100 per share to one worth mere pennies. These large-scale scams fooled even the most seasoned investors and policing agencies, so there's not too much you can do to personally investigate the companies. However, there are other smaller-scale scams that you can catch and be way of.

Penny stocks

Generally, a penny stock is a stock that is trading for less than $1 per share and is trading over the counter, as opposed to one of the major exchanges like the NASDAQ. The price does not matter as much as the facts that the companies are generally very small and highly volatile. Within a space of a few hours, a stock costing $1 can easily turn in a one cent stock or a ten dollar one. Because the volume of trades for the stocks are so low, even a few people selling all their shares or buying a large number shares can dramatically affect the stock price. The following picture depicts a penny stock certificate, and a description of a common scam is below it.

Picture from Wikipedia, May 2006

Pump and Dump

In a pump and dump scam, somebody will release either great news for the company or terrible news. As investors rush to buy or sell stock, the person is strategically placed to reap great financial benefit. For example, a person who owns 10,000 shares of a stock worth $1 could mass email a fake news story about the company's earnings and get the price to $10, at which point he or she could sell. The best way to avoid this scam is to avoid penny stocks altogether. Although you could possibly make money, most of the time investors lose out.

The Lowdown On Penny Stocks

Successful companies aren't born, they're made - and they have to work their way from humble beginnings and through the ranks just like everyone else. Unfortunately, some investors believe that finding the next "big thing" means scouring through penny stocks in the hope of finding the next Microsoft (Nasdaq:MSFT) or Wal-Mart (NYSE:WMT). Unfortunately, this strategy will prove to be unsuccessful in most cases. Read on to find out why pinning your hopes on penny stocks could leave you penniless.

Penny Stocks 101
The terms "penny stocks" and "micro cap stocks" can be used interchangeably. Technically, micro cap stocks are classified as such based on their market capitalizations, while penny stocks are looked at in terms of their price. Definitions vary, but in general a stock with a market capitalization between $50 and $300 million is a micro cap. (Less than $50 million is a nano-cap.) According to the Securities & Exchange Commission (SEC) any stock under $5 is a penny stock. Again, definitions can vary, some set the cut-off point at $3, while others consider only those stocks trading at less than $1 to be a penny stock. Finally, we consider any stock that is trading on the pink sheets or over-the-counter bulletin board (OTCBB) to be a penny stock.

The main thing you have to know about penny/micro stocks is that they are much riskier than regular stocks. (For background reading on penny stocks, see Wham Bam Micro-Cap Scam and How To Evaluate A Micro-Cap Company.)

A Fortune for a Penny?
What makes penny stocks risky? Four major factors make these securities riskier than blue chip stocks.

Lack of Information Available to the Public
The key to any successful investment strategy is acquiring enough tangible information to make informed decisions. For micro cap stocks, information is much more difficult to find. Companies listed on the pink sheets are not required to file with the Securities and Exchange Commission (SEC) and are thus not as publicly scrutinized or regulated as the stocks represented on the New York Stock Exchange and the Nasdaq; furthermore, much of the information available about micro cap stocks is typically not from credible sources. (For more insight, see Pretty In Pink Sheets.)

No Minimum Standards
Stocks on the OTCBB and pink sheets do not have to fulfill minimum standard requirements to remain on the exchange. Sometimes, this is why the stock is on one of these exchanges. Once a company can no longer maintain its position on one of the major exchanges, the company moves to one of these smaller exchanges. While the OTCBB does require companies to file timely documents with the SEC, the pink sheets have no such requirement. Minimum standards act as a safety cushion for some investors and as a benchmark for some companies. (To learn more, read The Dirt On Delisting.)

Lack of History
Many of the companies considered to be micro cap stocks are either newly formed or approaching bankruptcy. These companies will generally have poor track records or none at all. As you can imagine, this lack of historical information makes it difficult to determine a stock's potential.

Liquidity
When stocks don't have much liquidity, two problems arise: first, there is the possibility that you won't be able to sell the stock. If there is a low level of liquidity, it may be hard to find a buyer for a particular stock, and you may be required to lower your price until it is considered attractive to another buyer. Second, low liquidity levels provide opportunities for some traders to manipulate stock prices, which is done in many different ways - the easiest is to buy large amounts of stock, hype it up and then sell it after other investors find it attractive (also known as pump and dump). (To learn about the importance of asset liquidity, read Diving In To Financial Liquidity.)

Penny-Baited Traps
Penny stocks have been a thorn in the side of the SEC for some time because lack of available information and poor liquidity make micro cap stocks an easy target for fraudsters. There are many different ways in which scams are used to separate investors from their money. The most common include:

Biased Recommendations
Some micro cap companies pay individuals to recommend the company stock in different media, such as newsletters, financial television and radio shows. You may receive spam email trying to persuade you to purchase particular stock. All emails, postings and recommendations of that kind should be taken with a grain of salt. Look to see if the issuers of the recommendations are being paid for their services as this is a giveaway of a bad investment. Also make sure that any press releases aren't given falsely by people looking to influence the price of a stock. (For more on this, read Spotting Sharks Among Penny Stocks.)

Offshore Brokers
Under regulation S, the SEC permits companies selling stock outside the U.S. to foreign investors to be exempt from registering stock. These companies will typically sell the stock at a discount to offshore brokers who, in turn, sell them back to U.S. investors for a substantial profit. By cold calling a list of potential investors (investors with enough money to buy a particular stock) and providing attractive information, these dishonest brokers will use high-pressure "boiler room" sales tactics to persuade investors to purchase stock. (For more insight, check out What is a boiler room operation?)

The Penny Stock Fallacy
Two common fallacies pertaining to penny stocks are that many of today's stocks were once penny stocks and that there is a positive correlation between the number of stocks a person owns and his or her returns.

Investors who have fallen into the trap of the first fallacy believe Wal-Mart, Microsoft and many other large companies were once penny stocks that have appreciated to high dollar values. Many investors make this mistake because they are looking at the "adjusted stock price", which takes into account all stock splits. By taking a look at both Microsoft and Wal-Mart, you can see that the respective prices on their first days of trading were $21 and $16.50, even though the prices adjusted for splits was about 8 cents and 1 cent, respectively. Rather than starting at a low market price, these companies actually started pretty high, continually rising until they needed to be split.

The second reason that many investors may be attracted to penny stocks is the notion that there is more room for appreciation and more opportunity to own more stock. If a stock is at 10 cents and rises by five cents, you will have made a 50% return. This, together with the with the fact that a $1,000 investment can buy 10,000 shares, convinces investors that micro cap stock are a rapid, surefire way to increase profits. Unfortunately, people tend to see only the upside of penny stocks, while forgetting about the downside. A 10 cent stock can just as easily go down by 5 cents and lose half its value. Most often, these stocks do not succeed, and there is a high probability that you will lose your entire investment.

Conclusion
Sure, some companies on the OTCBB and pink sheets might be good quality, and many OTCBB companies are working extremely hard to make their way up to the more reputable Nasdaq and NYSE. However, the flip-side is that there are many good opportunities in stocks that aren't trading for pennies. Penny stocks aren't a lost cause, but they are very high-risk investments that aren't suitable for all investors. If you can't resist the lure of micro caps, make sure you do extensive research and understand what you are getting into.


Read more: http://www.investopedia.com/articles/03/050803.asp?partner=basics010612#ixzz1iiW4t65s
Posted: Feb 19, 2009
by Investopedia Staff

QUICKIES: Seven investment myths you should not fall for

Text: Prerna Katiyar | ET Bureau

Pick this stock, it's trading at 52-week low.' 'That stock is a multi-bagger, trading at such a low PE.' 'Penny stocks make fortunes while stocks trading below book value are a sure pick for making quick bucks.'

Haven't we all heard such statements at some point in our lives? If you are one of those who believe in such assertions, read on. For, these are among the many myths in investing.



Here we list seven of them


Myth No 1: Stocks trading below book value are cheap

Book value (BV) is the actual worth of a stock as in a company's books/balance sheet, or the cost of an asset minus accumulated depreciation.

BV depends more on historical cost and depreciation and often has little correlation to the current share price.

Shares of industries that are capital intensive trade at lower price/ book ratios, as they generate lower earnings. On the other hand, those business models that have more human capital will fetch higher earnings and will trade at higher price/book ratios.

"Price/book (ratio) of below 1 may be cheap but one should see other aspects such as earnings forecast, guidance, management and debt on the books of the company ," says Angel Broking's equity derivatives head Siddarth Bhamre.


Myth No 2: Stocks trading at low P/E are under-valued

Price to earning ratio (P/E) is one of the most talked about ratios in the market. This is based on the theory that stocks with low P/Es are cheap.

However, P/E alone doesn't tell much about the stock price. P/E multiples may be a quick way to value a stock but one should look at this in correlation with expected growth earnings, the risk factors involved, company's performance and growth potential .

"This is surely a myth. It is also an indication of uncertain future earning of the stock concerned," says Birla Sunlife Mutual Fund CEO A Balasubramanian.

The idea behind dividing price with earnings is to create a levelplaying field where some kind of comparison can be made between high- and low-priced stocks.

Since P/E ratios vary across sectors, with growth stocks consistently trading at higher P/E, one can only compare the P/E ratio of a stock to the average P/E ratio of stocks in that sector.


Myth No. 3: Penny stocks make good fortunes

Penny stocks by nature are lowpriced , speculative and risky because of their limited liquidity, following and disclosure.

If it's easy to invest in penny stocks - as here you shell out much less money per share than you would require for a blue-chip firm - it's also easy to lose.

Says Bhamre, "Fortune can be made by high-denomination stocks also. Denomination has nothing to do with the rationale for picking a stock. Generally , retail investors are fond of stocks that are at sub- Rs 100 levels. But there may be stocks that may be trading in Rs 1,000-plus price but may well be cheap. Clarity on earnings is more important here. Anytime, I would be more comfortable buying an ICICI Bank (currently trading at Rs 1,038) than an IFCI at Rs 45. One should look at earnings visibility."


Myth No. 4: The worst is over in the stock market

Timing the market, a common strategy among investors, means forecasting and that should best be left to astrologers and tarot readers.

If one has done one's valuation studies, one shouldn't worry about timing the market. No one had predicted the bull run would take the Sensex from a level of 10,000 in February 2006 to over 21,000 in January 2008 - just as no one had any idea of the following crash, which saw the same index plummeting to 9,000 in March 2009.

"Timing the market is more of a gut feeling. It's more on the basis of perception, as there is no such thing (that the worst is over) when the future is uncertain. One can never surely time the market. The worst is over is more of a probability than a certainty. Timing the market is very difficult as market is driven not just by earnings but also by sentiments ," says Balasubramanian.


Myth No 5: Stocks that give high dividends are the best bet

This comes from the notion that regular dividends are extra income in the shareholder's hand. This may not always be true.

While a company may be making decent payouts every year, the share price appreciation may not be comparatively high. Before investing in companies paying high dividends, it's important to analyse if the company is reinvesting enough profit to grow its earnings consistently.

Says Brics Securities' research VP Sonam Udasi: "It's not dividend that matters but the yield. For eg, a company may pay a 100% or even a 300% dividend on a stock with face value of Rs 10.

So, the investor may receive Rs 10 or Rs 30 per share when the stock may be currently trading at Rs 800 or Rs 1000. This would translate into an yield of 1% or 3% only. Also, such companies may not necessarily be reinvesting their earnings in the business to generate future earnings and so there may be no stock movement. The dividend may be high but the EPS and growth per se may be constant."



Myth N0 6: Index stocks are the best stocks

If this was true, most investors would safely park their money in such stocks in anticipation of maximum profit without looking out for other value stocks.

Most indices are a collection of stocks with the highest market cap. Take, for eg, the Sensex.

Companies that make up the index are some of the largest, with stocks that are highly traded based on their free-float.

"Index stocks may not necessarily be the best stocks as they are mostly based on market-cap or free-float of the company and not earnings. This doesn't mean that all stocks of the Sensex are highearning stocks. One must take a stock-by-stock call," says Balasubramanian of Birla Sun Life Mutual Fund.

The stock price of a company depends on its earnings. One can find high-earning stocks outside the key indices as well, he says. The risk is certainly less with index stocks as they are well researched and leaders in their respective sectors, but, again, the margins may not be very high. So it's better to keep your eyes open to other stocks, too.



Myth No 7: Stocks trading at 52-week low are cheap

Says Udasi: "There may be a time in the economic cycle when a blue-chip stock may hit a 52-week low.

But the first thing that should come to one's mind is why did the stock hit the 52-week low.

There must be something fundamentally wrong with the stock if it has hit a 52-week low, and chances are they may hit a new 52-week low.

52-week low in itself guarantees nothing. If at all one is picking stocks at 52-week lows, they should have a long-term horizon so that when the economic cycle turns, the stock is able to recover."

Needless to say, quality matters most while buying any stock.


http://economictimes.indiatimes.com/seven-investment-myths-you-should-not-fall-for/quickiearticleshow/9438662.cms

So what exactly are the risks and rewards to investing in penny stocks?

Penny Stocks

So you’re ready to learn how to trade penny stocks?  You want us to teach you where to find the best stock picks?  Before we get to that, you must first understand what a penny stock actually is.

There is a lot more to penny stocks than just their definition.  A penny stock is any stock under $5.  Often they are under $1.  However that doesn’t really explain what they really are, and how they are different from the stocks you hear about in the news.

Penny stocks are high risk, high reward stocks that can jump double or even triple digit percentage gains in months, weeks, or even a single day. With a conventional large stock, an increase of twenty percent a year is considered a great return.

When dealing with penny stocks, something as small as becoming noticed by a few large investors could be enough to send double or triple its value.

Large cap stocks provide a false sense of security. It is a common misnomer that huge companies are always safe investments. Just look at Bank of America during the financial crisis, Caterpillar when the housing market crumbled, AIG, Fannie and Freddie, the list goes on.  Goodbye dear WaMu! All of these companies are multi-billion dollar businesses, with worldwide brand recognition. The point is, no matter how large or celebrated a stock might be, there are no guarantees.

A penny stock provides the chance to take on the market risk that every company embodies, with the possibility of much higher payoffs.

Of course, penny stocks aren’t immune to problems either.  Make no mistake, more penny stocks will “crash” than NYSE or NASDAQ stocks.  They certainly offer greater risk, but the risk to reward ratio can greatly favor investing in a penny stock versus a stock like Ford or Microsoft.

So what exactly are the risks and rewards to investing in penny stocks?

Well, as stated before, the gains can be extraordinary. Why? The simple answer is a lack of liquidity. These penny stocks don’t boast a huge roster of thousands of investors, mostly because they trade on secondary markets (OTC and Pink Sheets). Secondary markets are an alternative to the NYSE and NASDAQ exchanges, where small companies can list for a smaller fee (15K versus 250K) or where larger companies (Nestle, Deutsche Telekom, etc.) can go to avert a lot of the red tape associated with major exchange listings.

Being listed on these secondary markets usually doesn’t allow for analysts to cover these stocks, good, bad, or indifferent. This results in less institutional interest in penny stocks, and thus, limited liquidity.

Once a stock starts to stir up interest though, the result often such a large percentage gain because the amount of buyers and sellers is typically small in comparison to a large cap stock. For example, say someone wants to buy a share of Apple. There are so many sellers and buyers of Apple that the buyer will most likely get to purchase that share at the market price. But for someone who wants to buy a penny stock, there are less sellers. That allows the sellers to set a higher price.  A hot stock will have a lot of buyers, and far less sellers.  A lot of demand, not a lot of supply.

Also, there is a psychological factor that comes into play. Jumping from ten to twenty cents does not seem like that big of a deal, but in percentage terms it’s just as big as a $100 stock shooting to $200. This can result in increased gains, because it is much harder for investors to bid a stock up from $100 than it is from 10 cents.

There are risks to investing in penny stocks, but these can all be managed with the discipline and knowledge on when to buy and sell. Locking in profits on a large spike in price is the one way experienced penny stock traders usually manage the risk. Getting too greedy could result in a loss of any profits.

Even if you don’t sell at the top, setting stop losses will reduce any large hits to your profits. This measure will allow you to automatically sell at a certain price, before it starts to drop too much.  Most experienced penny stock traders will never hold a position without a firm stop loss order in place.

Just remember, they can go down as fast as they went up.

In the end, penny stocks are high risk / high reward endeavors. Gains that NYSE or NASDAQ traded stocks might achieve in a decade could be experienced in days with a penny stock.

How do people find these hot penny stocks? There are literally endless ways to research individual equities, and thousands of stocks to filter through. 

http://pennystockalerts.com/penny-stocks/

What can you do if you believe your financial adviser or broker has pushed you into a bad investment?

Hallandale woman says she lost nest egg to bad investment advice

Fraud attorney says to take precautions when investing

By Donna Gehrke-White, Sun Sentinel

4:46 p.m. EDT, October 1, 2011

Robin Pittman of Hallandale Beach thought she was investing for a comfortable retirement. But the broker who promised her a ticket to her Golden Years instead gave her a setback she hasn't recovered from: He advised her to invest in a high-risk stock of a small company and she lost her money — more than $100,000.

Now Pittman finds herself with a penniless Roth IRA. "When it first happened I was in shock," said Pittman, 60, an administrative assistant at a construction company. "I would wake up at night" petrified over losing her nest egg.

Pittman's case spotlights an issue confronting many South Florida investors these days: What can you do if you believe your financial adviser or broker has pushed you into a bad investment?

As Pittman discovered, a little-known Washington-based group — the Financial Industry Regulation Authority — has created an arbitration program for investors to file claims against investment firms. The nonprofit industry group also serves as a watchdog, similar to the Bar Association for lawyers.

Pittman recently filed an arbitration claim with FINRA and hopes it will lead to her recouping at least part of her savings. She is asking her broker's former firm to pay her back the money she lost in her Roth IRA and another investment. Plus, she says, she is owed legal fees and $48,426 in interest.

FINRA spokeswoman Michelle Ong said the agency offers a first line of defense for individual investors as the nation's largest independent regulator of U.S. securities firms. FINRA created the online BrokerCheck at finra.org where investors can research any FINRA-registered broker or brokerage firm. It also has established rules for the nation's brokerages.

"It should be the first resource investors turn to when choosing whether to do business or continue to do business with a particular broker or brokerage firm," she said.

The federal Securities Exchange Commission and state agencies, such as the Florida Office of Financial Regulation, also oversee the financial industry. Investors can check with the state office to see whether brokers are registered to work in Florida.

But some in the financial industry question whether regulatory oversight is sufficient and if FINRA can effectively watch over brokerages. A few brokers can take advantage of investors without getting in trouble with the regulatory agency, said South Florida investment adviser Frank Armstrong. "As long as you don't break their [FINRA] little rules, you can create a whole lot of havoc," he said.

Those rules forbid brokers from "churning" stocks to make commissions, selling or buying investments without the client's authorization and requiring brokers to recommend only "suitable" stock for investors.

Former Miami federal prosecutor Andres Rivero said FINRA can be slow to act. But "it has a good record" of helping investors, said Rivero, who is now in private practice in Coral Gables.

Pittman said she is grateful for FINRA's arbitration system: It gives her a chance to get back her nest egg. "It took me forever to save it," said Pittman, who made $28,000 a year when she invested with broker Ted Bakurin of Parkland.

The single mom of two grown children accuses New Jersey-based Garden State Securities Inc. of not properly supervising Bakurin who she says invested her money in an unsuitable stock that should never have been used for retirement savings. She blames Bakurin for recommending the high-risk penny stock that earned him a big commission, according to her claim. It was not even traded on an exchange.

Bakurin denied any wrongdoing in a telephone interview. "Not everything is as it seems," he said. Bakurin said he did make money for Pittman in an annuities account. He declined to talk further about the annuities account.

Garden State Securities could not be reached despite several calls and an e-mail from the Sun Sentinel. The firm has not yet responded to the arbitration claim Pittman has filed.

Pittman's attorney, Mark Tepper, said Bakurin's investment recommendation to Pittman violates FINRA rules concerning disclosures about risky investments.

FINRA suspended and fined Bakurin $20,000 last year in another case "for selling customers unsuitable securities without disclosing the risks," agency records show. His broker's license was revoked last year after he didn't pay the fine, according to FINRA records. Two other cases filed against Bakurin are pending before FINRA's arbitration board, the agency's records show.

Bakurin said the FINRA license revocation and fine gives a distorted view of his work. "I know what my past looks like,'' Bakurin said.

Pittman's arbitration filing claims Bakurin recommended she fund her entire Roth IRA account in 2006 with stock from a small Vero Beach company named Multi-Link Telecommunications. Her claim alleges he did not tell Pittman, as required, about the dangers of buying low-priced shares of small companies: These "penny stocks" may trade infrequently and may be hard to accurately price.

Pittman ended up buying 211,400 shares in four transactions in 17 days from late April to mid-May. All the stocks sold for an average of 47.6 cents per share. Just two months later the investment tanked.

In July 2006, Multi-Link Telecommunications and its stock were merged with a Georgia-based pharmaceutical company, Auriga Laboratories, according to her arbitration papers. "Those merged shares eventually became worthless," her claim added. Pittman lost "irreplaceable savings."

Bakurin told Pittman "not to worry — she would get her initial investment back," according to her FINRA claim.

Pittman is still waiting for that to happen.

Read more here:
http://www.sun-sentinel.com/business/fl-investment-fraud-finra-20110930,0,5845457.story

Penny Stocks: Pump and Dump (SELL TO SUCKERS)

Penny stocks are those that trade at < RM 1.00.

Some investors confuse these low prices for value.

These stocks are often and easily promoted or manipulated.

Beware of the promoters or manipulators who hype these stocks in the internet forums.

They have often taken a position well before.

The unwary "investors" enter and soon find themselves buying these stocks higher than they can sell.

Here is an example of a stock that was from a forum.

Study the chart of the stock and the table of its prices and volumes.

I believe this chart depicts this penny stocks when it was being "Pumped and Dumped" by its promoters or manipulators. (Period of interest:  September 2010 to December 2010)

There are good lessons one can draw from this event.

Check the observations made below.

LCTH :  Daily Prices and Volumes

Prices (Daily)

Date Open High Low Close Volume Adj Close* Jan 19, 2011 0.28 0.28 0.28 0.28 437,800 0.28 Jan 18, 2011 0.29 0.29 0.28 0.28 435,000 0.28 Jan 17, 2011 0.28 0.29 0.28 0.28 469,400 0.28 Jan 14, 2011 0.29 0.29 0.28 0.29 479,000 0.29 Jan 13, 2011 0.29 0.29 0.28 0.29 993,400 0.29 Jan 12, 2011 0.29 0.29 0.28 0.29 744,000 0.29 Jan 11, 2011 0.29 0.29 0.28 0.29 409,000 0.29 Jan 10, 2011 0.29 0.30 0.28 0.30 833,600 0.30 Jan 7, 2011 0.30 0.30 0.28 0.29 678,300 0.29 Jan 6, 2011 0.28 0.30 0.28 0.30 1,728,800 0.30 Jan 5, 2011 0.27 0.28 0.27 0.28 583,600 0.28 Jan 4, 2011 0.26 0.28 0.26 0.28 487,300 0.28 Jan 3, 2011 0.26 0.26 0.25 0.26 492,100 0.26 Dec 30, 2010 0.26 0.26 0.25 0.26 217,000 0.26 Dec 29, 2010 0.26 0.26 0.25 0.26 93,000 0.26 Dec 28, 2010 0.27 0.27 0.26 0.26 86,000 0.26 Dec 27, 2010 0.25 0.28 0.25 0.27 1,468,000 0.27 Dec 24, 2010 0.25 0.25 0.25 0.25 166,200 0.25 Dec 23, 2010 0.25 0.26 0.25 0.26 203,800 0.26 Dec 22, 2010 0.25 0.26 0.25 0.26 648,700 0.26 Dec 21, 2010 0.25 0.26 0.25 0.25 822,000 0.25 Dec 20, 2010 0.26 0.26 0.25 0.25 598,400 0.25 Dec 17, 2010 0.26 0.26 0.26 0.26 400,600 0.26 Dec 16, 2010 0.26 0.26 0.26 0.26 57,400 0.26 Dec 15, 2010 0.26 0.27 0.26 0.27 169,600 0.27 Dec 14, 2010 0.26 0.26 0.26 0.26 456,400 0.26 Dec 13, 2010 0.26 0.26 0.25 0.26 649,500 0.26 Dec 10, 2010 0.26 0.26 0.25 0.25 732,200 0.25 Dec 9, 2010 0.26 0.26 0.25 0.26 303,900 0.26 Dec 8, 2010 0.26 0.26 0.25 0.26 304,600 0.26 Dec 6, 2010 0.26 0.27 0.25 0.26 625,500 0.26 Dec 3, 2010 0.27 0.27 0.26 0.26 628,600 0.26 Dec 2, 2010 0.27 0.28 0.27 0.27 283,400 0.27 Dec 1, 2010 0.26 0.27 0.26 0.26 93,500 0.26 Nov 30, 2010 0.28 0.28 0.26 0.27 875,200 0.27 Nov 29, 2010 0.28 0.28 0.27 0.28 579,100 0.28 Nov 26, 2010 0.28 0.28 0.28 0.28 378,800 0.28 Nov 25, 2010 0.28 0.28 0.28 0.28 720,800 0.28 Nov 24, 2010 0.28 0.28 0.28 0.28 305,900 0.28 Nov 23, 2010 0.29 0.29 0.27 0.28 928,300 0.28 Nov 22, 2010 0.29 0.29 0.28 0.28 1,057,800 0.28 Nov 19, 2010 0.29 0.29 0.29 0.29 504,200 0.29 Nov 18, 2010 0.29 0.30 0.29 0.29 552,100 0.29 Nov 16, 2010 0.31 0.31 0.30 0.31 811,000 0.31 Nov 15, 2010 0.34 0.34 0.29 0.31 3,137,500 0.31 Nov 12, 2010 0.38 0.40 0.37 0.37 2,716,800 0.37 Nov 11, 2010 0.37 0.38 0.35 0.38 3,223,300 0.38 Nov 10, 2010 0.38 0.38 0.36 0.37 789,500 0.37 Nov 9, 2010 0.40 0.40 0.36 0.38 1,299,100 0.38 Nov 8, 2010 0.39 0.40 0.38 0.38 4,302,600 0.38 Nov 4, 2010 0.32 0.41 0.32 0.38 11,517,500 0.38 Nov 3, 2010 0.31 0.32 0.31 0.32 466,000 0.32 Nov 2, 2010 0.32 0.32 0.31 0.31 419,000 0.31 Nov 1, 2010 0.32 0.33 0.32 0.33 1,067,600 0.33 Oct 29, 2010 0.30 0.32 0.30 0.31 1,036,800 0.31 Oct 28, 2010 0.30 0.31 0.29 0.31 127,000 0.31 Oct 27, 2010 0.29 0.31 0.29 0.31 572,600 0.31 Oct 26, 2010 0.28 0.29 0.28 0.29 309,000 0.29 Oct 25, 2010 0.28 0.28 0.28 0.28 204,300 0.28 Oct 22, 2010 0.28 0.28 0.28 0.28 130,000 0.28 Oct 21, 2010 0.28 0.28 0.27 0.28 156,100 0.28 Oct 20, 2010 0.27 0.28 0.27 0.28 254,000 0.28 Oct 19, 2010 0.28 0.28 0.28 0.28 40,000 0.28 Oct 18, 2010 0.28 0.28 0.28 0.28 12,000 0.28 Oct 15, 2010 0.27 0.28 0.27 0.27 0 0.27 Oct 14, 2010 0.28 0.28 0.28 0.28 70,000 0.28

Observations:

After a long period of promotion, many investors were made aware of the stock in the internet forum.  

Subconsciously, the stock entered their attention and was in their radar screen.  

Many hesitated and did not enter in the early stages of the promotion due to doubts and cautiousness.

Then, when the volume started to climb and the prices started to move upwards, these previously primed "investors" took notice.  

The more adventurous entered first and early at this stage.

As the price rose, more entered.  This was the confirmation that many of these "primed investors" were waiting and looking for.  "It must be true, the game is now on, I am getting in too."  

But note, they were buying at higher prices.  Some even bought more at higher prices (averaging up).   Did you notice that they were already paying a higher price than the "usual"?

Then more of the "dumb money" flowed in.  Look at the huge volume of stocks transacted on 4.11.2010.  This counter was the talk of the market now.  Ever wondered WHO SOLD on that day?  Of course, the manipulators and the smart money.

The party was as good as over by now.  However, more SUCKERS came in over the next few trading days.  With ALL SUCKERS in the stock now, and the smart money having moved out, there were no more SUCKERS to support the price.  

ALL the SUCKERS now holding the stocks were hoping to sell to ANOTHER SUCKER who was willing to buy from them at higher prices.  

Alas, NO new SUCKERS appeared.  This led to the precipitous fall in the price from the 6th trading day after the peak of the volumes and the price of the stock.

It was then a matter of awakening for those left holding the stock at high prices.  Over the subsequent weeks and months, they too realised they were SUCKED, holding or departing from the shares with their losses.

Prices (Daily)

Date Open High Low Close Volume Adj Close* Oct 13, 2010 0.28 0.28 0.28 0.28 80,600 0.28 Oct 12, 2010 0.28 0.28 0.28 0.28 135,000 0.28 Oct 11, 2010 0.28 0.28 0.28 0.28 120,000 0.28 Oct 8, 2010 0.28 0.28 0.28 0.28 0 0.28 Oct 7, 2010 0.28 0.28 0.28 0.28 20,600 0.28 Oct 6, 2010 0.28 0.28 0.28 0.28 42,000 0.28 Oct 5, 2010 0.28 0.28 0.28 0.28 13,000 0.28 Oct 4, 2010 0.28 0.28 0.27 0.27 220,000 0.27 Oct 1, 2010 0.27 0.28 0.27 0.28 91,900 0.28 Sep 30, 2010 0.27 0.27 0.27 0.27 72,600 0.27 Sep 29, 2010 0.28 0.28 0.27 0.27 28,400 0.27 Sep 28, 2010 0.28 0.28 0.28 0.28 190,000 0.28 Sep 27, 2010 0.28 0.28 0.28 0.28 3,000 0.28 Sep 24, 2010 0.27 0.27 0.27 0.27 1,800 0.27 Sep 23, 2010 0.28 0.28 0.28 0.28 60,000 0.28 Sep 22, 2010 0.28 0.28 0.28 0.28 172,000 0.28 Sep 21, 2010 0.28 0.28 0.28 0.28 5,000 0.28 Sep 20, 2010 0.28 0.28 0.28 0.28 0 0.28 Sep 17, 2010 0.28 0.28 0.28 0.28 6,000 0.28 Sep 15, 2010 0.28 0.28 0.28 0.28 10,000 0.28 Sep 14, 2010 0.28 0.28 0.26 0.26 71,600 0.26 Sep 13, 2010 0.27 0.28 0.27 0.27 0 0.27 Sep 9, 2010 0.28 0.28 0.28 0.28 10,000 0.28 Sep 8, 2010 0.27 0.27 0.27 0.27 10,600 0.27 Sep 7, 2010 0.28 0.28 0.27 0.27 36,000 0.27 Sep 6, 2010 0.27 0.29 0.27 0.27 0 0.27 Sep 3, 2010 0.28 0.28 0.28 0.28 25,600 0.28 Sep 2, 2010 0.27 0.28 0.26 0.28 76,200 0.28 Sep 1, 2010 0.28 0.28 0.28 0.28 0 0.28 Aug 30, 2010 0.28 0.28 0.28 0.28 43,000 0.28 Aug 27, 2010 0.28 0.28 0.28 0.28 20,000 0.28 Aug 26, 2010 0.28 0.28 0.28 0.28 70,000 0.28 Aug 25, 2010 0.28 0.28 0.28 0.28 186,000 0.28 Aug 24, 2010 0.29 0.29 0.28 0.28 40,000 0.28 Aug 23, 2010 0.28 0.28 0.28 0.28 20,600 0.28 Aug 20, 2010 0.28 0.28 0.28 0.28 200,000 0.28 Aug 19, 2010 0.29 0.29 0.29 0.29 0 0.29 Aug 18, 2010 0.29 0.29 0.28 0.29 163,700 0.29 Aug 17, 2010 0.28 0.29 0.28 0.29 241,500 0.29 Aug 16, 2010 0.28 0.29 0.28 0.28 341,800 0.28 Aug 13, 2010 0.28 0.29 0.28 0.29 214,000 0.29 Aug 12, 2010 0.29 0.29 0.29 0.29 0 0.29 Aug 11, 2010 0.29 0.29 0.29 0.29 0 0.29 Aug 10, 2010 0.29 0.29 0.29 0.29 37,500 0.29 Aug 9, 2010 0.31 0.31 0.29 0.29 19,000 0.29 Aug 6, 2010 0.29 0.31 0.29 0.29 0 0.29

Prices (Daily)

Date Open High Low Close Volume Adj Close* Aug 3, 2010 0.30 0.30 0.30 0.30 30,000 0.30 Aug 2, 2010 0.28 0.30 0.28 0.30 18,600 0.30 Jul 30, 2010 0.30 0.30 0.29 0.30 202,000 0.30 Jul 29, 2010 0.31 0.31 0.30 0.30 238,800 0.30 Jul 28, 2010 0.29 0.30 0.29 0.29 53,000 0.29 Jul 27, 2010 0.29 0.29 0.29 0.29 95,000 0.29 Jul 26, 2010 0.29 0.29 0.29 0.29 94,900 0.29 Jul 23, 2010 0.30 0.31 0.29 0.29 306,000 0.29 Jul 22, 2010 0.30 0.31 0.29 0.29 40,500 0.29 Jul 21, 2010 0.29 0.31 0.29 0.30 273,600 0.30 Jul 20, 2010 0.29 0.31 0.29 0.29 185,200 0.29 Jul 19, 2010 0.30 0.30 0.29 0.30 18,000 0.30 Jul 16, 2010 0.29 0.31 0.29 0.29 0 0.29 Jul 15, 2010 0.31 0.31 0.29 0.31 159,600 0.31 Jul 14, 2010 0.29 0.31 0.29 0.31 15,000 0.31 Jul 13, 2010 0.28 0.29 0.28 0.29 1,800 0.29 Jul 12, 2010 0.29 0.29 0.28 0.28 28,900 0.28 Jul 9, 2010 0.29 0.30 0.29 0.30 50,000 0.30 Jul 8, 2010 0.29 0.29 0.29 0.29 25,000 0.29 Jul 7, 2010 0.29 0.30 0.29 0.29 37,000 0.29 Jul 6, 2010 0.28 0.28 0.28 0.28 10,000 0.28 Jul 5, 2010 0.28 0.30 0.28 0.28 0 0.28 Jul 2, 2010 0.29 0.29 0.29 0.29 20,000 0.29 Jul 1, 2010 0.29 0.29 0.29 0.29 10,000 0.29 Jun 30, 2010 0.29 0.29 0.29 0.29 26,000 0.29 Jun 29, 2010 0.29 0.29 0.28 0.28 100,500 0.28 Jun 28, 2010 0.31 0.31 0.29 0.30 75,000 0.30 Jun 25, 2010 0.29 0.31 0.29 0.29 0 0.29 Jun 24, 2010 0.30 0.30 0.30 0.30 10,000 0.30 Jun 23, 2010 0.30 0.32 0.30 0.31 680,700 0.31 Jun 22, 2010 0.29 0.30 0.29 0.29 0 0.29 Jun 21, 2010 0.29 0.30 0.29 0.29 121,200 0.29 Jun 18, 2010 0.29 0.29 0.29 0.29 20,000 0.29 Jun 17, 2010 0.30 0.30 0.30 0.30 1,000 0.30 Jun 16, 2010 0.29 0.29 0.29 0.29 85,000 0.29 Jun 15, 2010 0.28 0.29 0.28 0.29 20,000 0.29 Jun 14, 2010 0.28 0.30 0.28 0.28 0 0.28 Jun 11, 2010 0.28 0.30 0.28 0.28 0 0.28 Jun 10, 2010 0.29 0.29 0.29 0.29 40,000 0.29 Jun 9, 2010 0.29 0.30 0.29 0.30 46,000 0.30 Jun 8, 2010 0.28 0.28 0.28 0.28 22,700 0.28 Jun 7, 2010 0.28 0.28 0.28 0.28 7,000 0.28 Jun 4, 2010 0.28 0.28 0.28 0.28 600 0.28 Jun 3, 2010 0.28 0.31 0.28 0.29 89,800 0.29 Jun 2, 2010 0.28 0.29 0.28 0.28 0 0.28 Jun 1, 2010 0.29 0.29 0.28 0.29 282,600 0.29 May 31, 2010 0.29 0.29 0.29 0.29 12,000 0.29 May 27, 2010 0.28 0.29 0.28 0.29 216,200 0.29 May 26, 2010 0.28 0.28 0.28 0.28 168,000 0.28 May 25, 2010 0.29 0.29 0.27 0.28 378,800 0.28 May 24, 2010 0.29 0.29 0.28 0.29 85,000 0.29 May 21, 2010 0.28 0.29 0.27 0.29 162,500 0.29 May 20, 2010 0.29 0.29 0.28 0.29 121,800 0.29 May 19, 2010 0.30 0.30 0.30 0.30 305,000 0.30 May 18, 2010 0.31 0.31 0.30 0.30 173,000 0.30 May 17, 2010 0.31 0.31 0.31 0.31 44,600 0.31 May 14, 2010 0.31 0.31 0.31 0.31 77,000 0.31 May 13, 2010 0.32 0.34 0.30 0.31 730,100 0.31 May 12, 2010 0.31 0.32 0.31 0.31 866,700 0.31 May 11, 2010 0.33 0.33 0.33 0.33 30,000 0.33 May 10, 2010 0.33 0.33 0.32 0.33 144,700 0.33 May 7, 2010 0.32 0.34 0.32 0.32 253,600 0.32 May 6, 2010 0.34 0.34 0.33 0.34 272,300 0.34 May 5, 2010 0.34 0.34 0.34 0.34 15,000 0.34 May 5, 2010 0.0178 Dividend May 4, 2010 0.36 0.36 0.35 0.36 206,100 0.34 May 3, 2010 0.36 0.36 0.36 0.36 30,000 0.34

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