On CNOA, CNBC Aids And Abets Penny Stock Promoters
Posted by timothysykes on Mon 14th of Apr, 2008 08:14:28 PM
Tags:
Sponsor Offer:
Let me start by saying I have no problem whatsoever with penny stock promotion—these tiny / failing / fraudulent companies need all the exposure / hype they can get or else they’ll never raise any capital and fail / be exposed as the frauds that they are soon rather than later. But I do take offense when entertainment outlets like CNBC try to pass themselves off as credible researchers. As I’ve posted HERE and HERE, their bumbling has hurt too many investors and they’ve helped make people afraid of penny stocks—which I cannot permit.
Now, one of their wannabe journalists / entertainers, Sri Jegarajah, has written the single most naïve penny stock article I’ve ever read, “Wild About Rice” in which Sri mistakes paid-for stock promotion for credible research forcing me to explain the rules of the game to all the poor schmucks who mistakenly view CNBC as a credible source.
Besides quoting CNOA’s CEO (we all know how useless that is, what’s he gonna admit the company’s a pump and dump scheme?), and a Seeking Alpha article—whose writers are no more qualified than bums begging for change on the street, Sri proudly quotes Source Advisors, forgetting (not realizing?) to mention they’ve been paid $25,000 “by a third party” (pump and dumper, cough, cough) to publish their BS report. And, as if to repent for his sins, Sri closes out the article quoting Patrick Murphy of Murphy Analytics who was only paid $1,000 for his efforts (scroll down to the bottom and be better than Sri, aka read the disclaimer).
Sorry Sri, I’m gonna have to take you down on this—you’re either lazy, naïve, stupid or corrupt—take your pick–no matter how you slice it you should be fired. You’re no journalist, you’re an entertainer, go learn to play a musical instrument, maybe you won’t hurt as many people in that racket.
And don’t even think about coming at me with CNOA’s earnings report. Yes, to naïve investors, it looks beautiful, but they forget that China—and more specifically—Chinese penny stocks—are beautifully corrupt. Any and all figures are sure to be exaggerated—at best—and totally fraudulent at worst. The only reason I don’t bother digging cuz I don’t feel like getting my kneecaps busted by these promoters. Not that it would even do any good because the only thing that matters here is QUIN. They are the market makers who blatantly control where this stock goes. They can pump this thing up to $3-$4 if they want, they don’t even have to pay off idiots like Sri, at least probly not (I’m not sure of what Sri’s deal is with them).
As if it couldn’t get any worse, pumpers are spreading false rumors that Jim Rogers likes CNOA—all because this article made the amazing connection that CNOA is a Chinese play and Jim Rogers likes China (no direct connection whatsoever!).
And you guys wonder why I’m so cynical—behold the joke that is the finance industry!
Disclaimer: I have no position, QUIN hasn’t pumped the stock up enough to interest me to short…yet, nor would I ever buy this stock cuz I like to sleep well at night! I just enjoy cutting through the BS.
Check out my brand new DVD, ShortStocking - the only guide you'll ever need to profit from short selling!
Related Reading
38 Responses
Other Websites Referencing This Post
- Is Dennis Gartman A Classy Pump And Dumper? You Be The Judge | TIM - Timothy Sykes
- How To Short Sell aka What Is Short Selling | TIM - Timothy Sykes
- Interview with Timothy Sykes - StockTickr Blog
- Step aside popular stocks, it’s time for smaller more volatile plays | Sourfizz
Tim, you should think about putting in a quote window on your website…
Not enough $ in telling the truth….yet.
I remember running across that article the other day and thought it was a little too glowing to be unbiased. Thanks for pointing out the source’s funding.
I unfortunately got involved in a pump and dump on CNOA.pk a few months back. My wife said it was a tip from a doctor she worked with…it was unfortunately it was from a fax machine. The stock has seemed to recover from the 1.07 I sold at (bought at 1.56 went to almost 3). I thought I was the smartest guy in town for about a day. TTThedgefund recommends GILD IBM calls for Wednesday, I know you get critical when I mention him but hes been pushing IBM and Gild call options for wed so just a little money where his mouth isin advance. I bought 100 contracts og GILD May 50.00 today. Fingers are crossed tightly. Tim what do you think about CROX now that it will nearly be a penny stock by tommorrow?
Yah rice is booming, if u wanna play it, find a real company, not a pump and dump–can’t seem to go wrong with MOS
breaking out
Tim-
Great read, so true. QUIN controls so many of these stocks too… stunningly it’s always China… GZGT… CVDT…. OTHM…… CSUN….. CFUL what’s next..
AGU possible breakout, but its so small %-wise, MOS is def. breaking out
KYUS the next MXFD and RVNG scamola - RVNG begins to sell off, as they gear up to start KYUS
[img]http://bigcharts.marketwatch.com/charts/big.chart?symb=kyus&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=1&state=8&sid=2943122&style=380&time=6&freq=1&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=6598&mocktick=1[/img]
Excuse my ignorance, but what is QUIN?
AGU -pinned 52 week high…MAAAASIVE VOLUME TODAY, +8.5% on a SEVENTY DOLLAR STOCK! You cannot ask for more Tim, just can. MOS +4% today…
MON- pinned 52 week high
MOO- great agriculture, agri-materials ETF
POT- 52 week high, MASSIVE volume…+2% on an almost $200 stock…bigtime.
you dont play these for 20%,30%,40% gains Tim, you play them for appreciation value.
i dont know how to play those big stocks, i like going for 20-30% moves within 1-2 days, everything else is too slow
dont short it guy.. this thing is gonna take off…
absolutely no reason to play your pennies TIM. you could put that same 18000 grand in DVN at 110 lets say and sell out at 111 and make a hundred bucks quick..
#14, that way of thinking is why so many people with $2-$50k never make much in the market…it is about percent gains, focus on finding 10-30% moves and the little $ profits will add up. never ever use 100% of your portfolio
Jim–I’m not shorting it, I just though people should know this is a pump and dump, not a real company
scalping from 110-111 will NEVER be as high percentage profits as some of my penny plays, do me a favor and read back through the past 300 posts or so…u’ll see what i mean
anybody can, thats why i only allocate 20-30% of my assets to each play and i cover my losses quickly…also while yes i do play illiquid stocks, as my account grows, u’ll see me focus more on highly liquid stuff like COIN and CPST
Tim, do you ever follow “All Allan” http://allallan.blogspot.com/
the dude is kinda uncanny at picking penny stocks, but he goes long, not short…
ASTI, QTWW, ICPR, NNVC, AQI, PNP,VLCN, CCC, MOSY
I dont think I have ever witnessed the dude report anything less than 25% gains per position.
What thinks you about those picks?
Kudos on a nice bit of research Timmay. CNBC is scum.
….*should have been VLNC
most of his picks have already been pumped and dumped, but in theory, anything he picks GOES WAY UP, and almost always RIGHT BACK DOWN….so his picks are usually great shorts eventually.
Good call on CPST i will decide what I want with that SOB tomorrow. Also GSX is on my watch list might not be youe style but I will take gains from it when it wants to rear its ugly head to me.
DAR is the best real company ag play imho, and it doesn’t cost a million/share.
BRING ON THE NEW SITE!
hell no, i’m not part of it, the name of the game here is size of assets managed/fees generated–i’m in publishing/advertising…i just gotta cut through all the BS so everyone gets the joke for once
Ah, here’s the cause of Sri’s incompetence in finance:
“Jegarajah holds joint honors in English and theatre studies from the University of Warwick in the UK.”
- CNBC
Hi guy’s,
I observe your site for 2 weeks. this is a cool community here…
I’ve a question to you tim or other guy’s. I’m living in germany and in europe there is a problem to go short in smallcap’s. So i’m thinking about to open an account in the United states. Which restrictions do you have for shorting share’s? In Germany it is only allowed to commercial traders, but I can short approx. 1000 US shares over CFD’s (contract for difference) derivates. the problem is - only bigger companies I’m able to short.
Back to my question. Can anyone go short with your oversee-accounts (from my point of view), like thinkorswim? I read something about a $25k limitation.
thanks for your help
chris
Tim,
I’m glad you posted this, because I sold my shares (bought at $1.25) for $2 a few days ago. Hopefully now I can do it again.
You’re a good trader, but you don’t seem to be very good at fundamental analysis. This post completely lacks a discussion of the fundamentals. CNOA has a ~4 P/E and grew its net income by 297% YOY from 2006. Even better, it’s been putting that net income right into the bank as cash. See here: http://www.quotemedia.com/resu.....ymbol=CNOA
9 million in cash at the end of 2007. 19 million in equity. That translates to a book value of 36.9 cents/share — not bad for such a fast-growing, cash-adding company.
Anyway, you’re might be better off not shorting this one. You’ll probably do OK — these things take wide swings both ways. But in the long-term, you’d get slaughtered.
Ben—u got a few thing backwards–i’m not a great trader, and I purposely didnt include fundamentals “analysis” here cuz the fundamentals are all a sham. 99.9% of all microcaps are shams. trust me on that. so i’m not not corrupt my post with some misleading figures.
and i never short long-term, i take my 5,10,20% gains and then move on
That’s fine. In that case, though, you certainly would have missed out of FRPT, ABAT, and plenty of others. If you think it’s a sham, then I guess nothing I say can convince you otherwise. If it’s not a scam, though, you have to admit that it’s got strong fundamentals.
I think it’s unreasonable to claim that all the contracts listed here are just fabrications, and that CNOA is just doing all this work to sell some shares of worthless stock. That’s a risky practice. I know what real scam stocks look like, having lost money on PK stocks. They usually don’t file with the SEC and they’re usually much more sketchy.
The fact that it’s a Chinese stock does increase the uncertainty, I’ll admit.
they pay for exposure, not definitely a sham, but definitely a lot of stuff wrong with them and a lot of shareholders who are willing to sell
Yeah. The most suspicious thing about them is just how good their fundamentals are. But time will tell if they are a scam. Today’s selloff is just natural — when a stock moves 100% up, you’d expect at least a 30% pullback.
Chinese microcaps have all been selling of like crazy. Value investors make their best money in times like these. However, you may be right in that ultimately the best way to play microcaps is short. And it’s always wise to be short in a bear market.
As far as paying for analysis, that’s not uncommon. In fact it’s the rule of the game everywhere. The biggest stocks do it too, except their pumpers involve the sell-side of massive underwriting Investment Banks.
CNBC’s article was a surprise to me. Your article is also a shock. I have watched this stock for more than half a year and started taking a small position a month ago. I did some DD before buying this company. I called their competitor in China. I searched their products on numerous Chinese websites using baidu.com. The company is real and their fundamentals is fantastic. Yet the stock is unbelievablely cheap. This can be contributed so many bashers on Yahoo board. You may risk your reputation this time by doing so little DD by yourself.
1. There are dozens of Chinese Companies listed on OTCBB making millions of dollars every year and growing more than 30% ~ 100%. Many of them has already moved to either AMEX or NASDAQ, AOB, ABAT, HOGS, SHZ, just name a few of them. China lacked OTC markets for privately-run small or medium companies before. That’s why so many of them had to seek listing overseas.
2. CNOA purchased Bellisimo Vineyard in California for about $14 million on Feb 29, 2008. Do you think a sham company can aquire such big land in USA? On March 25, 2008, the Company and the group of six investors mutually agreed to terminate the Fixed Price Standby Equity Distribution Agreement they had entered in May, 2007. Do you think a sham company hungary for funds would shut itself out of equity financing? CNOA generated huge cash last year. The only thing I’m worried is how they gonna spend the money. All lands in China are owned by the State. It’s hard for them to purchase land there.
3. The paid Murphy report is dated in July 2007. I admit they tried to raise funds by equity financing last year, but they got better deal this year using debt financing paying only 4% interest. Their cash flow from operation is also enough to complete next acquisition to be closed this month.
Anyway, your bashing created good opportunity for me. If the price drops below $1.2, I will buy more cheap shares to increase my position.
Listen, business may be fine, it may be extraordinary, but just dont trust anybody–maybe they’re selling stock by the bushel, maybe their auditor is lying, i can practically guarantee there isi something wrong here, whether it takes 1 week, 1 month, or 1 year to discover it thats the question
made nice money on cnoa /// play the game/// lets talk about jim cramer// he did more damage than all the penny pumpers but together//
What are you talking about?
CNOA is real & strong.
“Any and all figures are sure to be exaggerated” you say, why?