I don’t care how you look at it. The truth is that a lot of people have left the micro cap marketplace over the last 6-9 months; mostly traders. The micro cap market became a trader’s market a few years ago when all the new Electronic Communications Networks (ECNs) were introduced. At this time, the market makers took more of a hands off approach and small companies have struggled in the marketplace ever since.
Traders became fed up with getting stuck in DTC chilled stocks, getting hung up in bad promotions, getting shafted by bad companies and so on.
Now we seem to be left with a lot more investors than traders; back to this in a moment.
I have watched stock promotion closely over the last 4 months and I can tell you this: Stock promo campaigns are not reaching an audience anymore because there is no audience. They left…
The only way stock promo is working right now is with stock buying groups which are, of course, illegal. But there will always be a market for volume. A careful analysis a stock promo campaign that is successful indicates a lot of tape painting. And, here is how it works:
The main entity hired to do the campaign sends out emails, has hired hands working in chat rooms and on message boards to pump the stock. At the same time, another set of hired hands works the box. These are individuals that route orders to the bid side and offer side, buy and sell the stock to one another to create the illusion of volume hoping to suck in the few sheep that are out there. This stuff looks like it works… for a day. These campaigns are expensive too; costing the company or the third party tens of thousands of dollars a day to run. The expensive promoters are the last game in town. These days if you are a promoter that does nothing more than send emails and put up a profile on your website, you likely are not getting any work because what you do is not working anymore.
This leads me back to the investors. Interestingly the two companies (both have liquidity in the marketplace that is real and is not manufactured) that I provide investor relations for have a lot of investors. I have developed a professional relationship with many of the investors of both companies. One of the client company’s CEO just started updating investors 2-3 times a week via a brief blog on the company’s website. The engagement has been excellent.
Reaching and attracting investors is the only way you are going to build a company on the micro caps today and in the future. Unless you want to spend tens of thousands of dollars every month making your stock trade, you may consider building a relationship with your shareholders. After all, happy shareholders are the best sales force for your stock that you can ever have.
Are you tired of the same old stock promo game? Ready to try something new?
Category: Investor Communications