Shorting El Chupacabra … the paid promotion of Nasdaq-listed SAPX

I love short selling pump and dumps. One of the problems with shorting pump and dumps though is that many of them are companies that have been put together for the sole purpose of being promoted and the insiders behind the pump control most of the shares, allowing them to potentially squeeze short sellers or prevent short sellers from finding shares to short prior to the stock dropping big. That risk is minimized when shorting listed companies. Listed companies that get pumped tend to be real companies with bad businesses and lots of disgruntled shareholders who are quick to sell into any spike. The large number of shareholders also means there is a good chance of finding borrows on shares to short.

My one regret of my trading in past years is that I have not been aggressive in shorting listed pump and dumps. I changed that this time. See my tweet from January 23rd in premarket: “We found the chupacabra … a current Nasdaq stock getting a paid promotion http://bit.ly/yUkARn Join chat to see what I do.” While I was trying to sell Tim Sykes’ service by using my affiliate link, those in chat could see what I did, which was short sell 3000 shares at $0.468 after commission at Interactive Brokers. Unfortunately I couldn’t find more shares. But the next day the pump continued and I found a lot more shares, averaging to 34,000 shares short at $0.46392. While I got squeezed to a high (briefly) of $0.59 in late premarket, the stock ended the day at $0.43. The next day (today) it plunged right after the market open and hit a low of $0.34. I covered at an average price of $0.374 for a 19% profit ($3,065). See my trade on Profit.ly below:

$3,064 profit SAPX Short Stock
IB auto-import 1/10 to 1/26 (to catch NUVI short I was still holding from 1/10 to 1/17 import) still short NECA STEV

Posted by MichaelGoode /
http://profit.ly/1Mml7F/?aff=174

Daily candlestick chart of SAPX (notice the front-run prior to the start of the pump on January 23rd):

Intraday 5 minute candles from 1/20 to 1/25:

The total compensation disclosed on SAPX (Seven Arts Pictures – Nasdaq) from pumpers I follow (trying to account for multiple websites being run by the same pumper) was $150,000.

Here are some of the disclaimers. First are the ones from the weekend of January 21/22/23:

PennyPickFinders.com:

Pennypickfinders.com expects to be compensated up to Thirty Five Thousand Dollars by a third party for a two day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ). Pennypickfinders.com was previously compensated Fifteen Thousand Dollars by a third party for a one day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ).

MarketCaliber.com (exact same as the above so I figure they are the same)

MarketCaliber.com expects to be compensated up to Thirty Five Thousand Dollars by a third party for a two day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ). MarketCaliber.com was previously compensated Fifteen Thousand Dollars by a third party for a one day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ).

ResearchDrivenInvestor.com

RDI aka research driven investor llc has been previously compensated forty thousand dollars cash by legacy media group inc, a non-affiliated third party to profile SAPX for a one day investor relations campaign. RDI aka research driven investor llc has been compensated an additional forty thousand dollars cash by legacy media group inc, a non-affiliated third party to profile SAPX for a one day investor relations campaign. To date RDI aka research driven investor llc has been compensated eighty thousand dollars cash.

PennyStockProphet

PennyStockProphet.com expects to be compensated up to Thirty Five Thousand Dollars by a third party for a 2 day advertising agreement regarding Seven Arts Entertainment Inc (SAPX: NASDAQ)  PennyStockProphet.com was previously compensated Fifteen Thousand Dollars by a third party, for a one day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ).  Additionally, PennyStockProphet.com was also previously compensated Thirty Five Thousand Dollars by a third party for an advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX.NASDAQ).  Total past compensation for advertising services has been Fifty Thousand Dollars by a third party for 2 seperate advertising campaigns regarding Seven Arts Entertainment Inc, (SAPX.OB)

PennyStockBullReports

 Penny Stock Bull Reports aka picks penny stock llc has been previously compensated forty thousand dollars cash by research driven investor llc, a non-affiliated third party to profile SAPX for a one day investor relations campaign. Penny Stock Bull Reports aka picks penny stock llc has been compensated an additional forty thousand dollars cash by research driven investor llc, a non-affiliated third party to profile SAPX for a one day investor relations campaign. To date Penny Stock Bull Reports aka picks penny stock llc has been compensated eighty thousand dollars cash.  To view our full disclaimer please visit http://www.pennystockbullreports.com/Disclaimer.aspx

SecretStockPromoter:

 SecretStockPromoter.com expects to be compensated up to Thirty Five Thousand Dollars by a third party for a two day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ). SecretStockPromoter.com was previously compensated Fifteen Thousand Dollars by a third party for a one day advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ).  Additionally, SecretStockPromoter.com was also previously compensated Thirty Five Thousand Dollars by a third party for an advertising campaign regarding Seven Arts Entertainment, Inc. (SAPX: NASDAQ). Total past compensation for advertising services has been Fifty Thousand Dollars by a third party for 2 separate advertising campaigns regarding Seven Arts Entertainment Inc, (SAPX: NASDAQ).

 

Right before the open on January 24th Jonathan Lebed and WallStreetGrand joined the pump party and dealt their followers huge losses as SAPX gapped up big (hitting .59 in premarket trading before opening at .52 and closing at .43)

My firm Lebed Biz LLC has been compensated by a third-party (Wall Street Grand LLC) $20,000 cash for a one-month SAPX investor relations contract.

 

WSG has been compensated $40k for a two day awarerness campaign on SAPX by a third party, Legacy Media Group Inc.

 

Disclosure: No positions in companies mentioned above. I have an ongoing business relationship with Tim Sykes that is explained in my terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

 

 

 

One thought on “Shorting El Chupacabra … the paid promotion of Nasdaq-listed SAPX”

  1. In the age of the internet I still find it mesmorizing that people fall for these pumps. Maybe they’re older or just so uninformed that they still believe in get rich quick schemes while blindly investing their money in something they no nothing about.

    I also wonder, when they get burned once, do they come back for more or is it someone else taking their place, new blood sorta.

    Even back when I first started trying to trade, I never went for the get-rich-type of trading, I tried to learn something, whatever it was at the time. The fact that this stuff seems to be getting bigger over time instead of shrinking may point to a bad economy, or people that didn’t invest their money and now they’re trying to catch up by “beating” the curve.

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