What Does "Pump And Dump" Mean

Pump and Dump is an illegal practice where an attempt is made to increase the share price of a company by spreading fake good news.

Normally this is applied to small cap shares where you only need to encourage a few purchases to get large price rises. Sometimes it happens on web forums, sometimes "Boiler Rooms" phone up people who are on various companies share holder list, other people set up websites that look like a genuine news site.

There is more on this, a lot more, on Google Pump and Dump.

My Ownership

So we have a simple dilemma, do you trust the commentaries to be posted without malicious intent?

If I say that I own shares in a company then you may very well consider that I am finding positives in the company in order to boost its price so that I can sell at a profit.

If I say that I do not own shares in a company you may very well consider that I am being unbiased.

However if I were the type of person to Pump and Dump then it follows that I would also be the type of person to lie.

So if I am dishonest then saying whether I own a share or not provides you no useful information.

If I am honest then saying that I do own the share is getting awfully close to a recommendation and a visit from the regulators.