Stock Spam Promotion in Major Financial Publications! Guangzhou Global (GZGT)

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 5

A couple days ago I was reading Investors Business Daily and something caught my eye  – no it wasn’t a great piece on technology trends or the next hot company.  It was a full page ad from growthstockguru.com promoting a pink sheet penny stock, Guangzhou Global (GZGT)!  I read a lot of financial publications and don’t ever recall seeing a full length ad with the same kind of flashy promotion you get in your junk email.  Is the desperation for ad dollars this great?  To me it’s unbelievable that respected publications like Investors Business Daily would put their credibility on the line for a few bucks like this.  IBD isn’t the only one.  Apparently Forbes, Fortune and BusinessWeek were running these ads as well but I haven’t seen them.  The IBD ad is right in front of me on page A13 of the Friday edition (the ad is running yet again on page A15 of the weekend edition).  Shame on you IBD and other publications for being a part of the stock spam problem and not a part of the solution.  How do you live with yourselves knowing that some of your readers may have naively jumped into this stock before the big dump.

The IBD ad ran in the Friday edition.  After all the pumping from these slick ads, Guangzhou Global (GZGT) began the big dump with a little more than an hour to go in  trading Friday.  A nearly 38% drop.

gzgt stock spam
chart via MSN

I would like to commend Kiplinger’s for being responsible and not running these ads.  According to Thomas Anderson of Kiplinger, they were also approached and declined to run the ad.  There is some interesting background in this article about the relationship between growthstockguru.com, GZGT and the advertiser as well as the financials of the company.  Some highlights:

– The editor of growthstockguru.com, Aharon Bronfman doesn’t show in a search of private and public databases.  It’s entirely possible this person doesn’t even exist! Do a search in Google and you’ll see what I mean.  Fifteen years of investment experience and this guy is invisible?  Also interesting to note that the website went online just days before GZGT started trading.  So much for the hype in the ad that claims Aharon’s 3 recent stock picks went on to extraordinary gains. 

I’ve taken this a step further and uncovered the following:

– The listed address for GrowthStockGuru.com is

Growth Stock Guru
1461 A First Avenue, # 360
New York, NY 10021-2209
USA

If you do a Google search for the address 1461 A First Avenue, #360, New York, NY 10021-2209 you start seeing other unsavory companies with the same address such as

– A Witherspoon, Seymour & Robinson Inc which looks to be a fairly shady company in its own right

– Is it coincidence that another investing site tradesoeasy.com with rumored links to a german spammer has the same address?  I think not.  It appears that the address used by growthstockguru.com and many other unscrupulous companies is some sort of address forwarding service. 

It’s unclear just who owns what and all the parties behind the pump and dump scheme.. but the bottom line is that Business Week, Forbes, Fortune and Investors Business Daily, whether they realized it or not,  all were a part of that.  That is mighty disturbing.  Could they not do a simple background check as I have done and realize this was most likely a classic pump and dump scheme? Or was the desperation for ad dollars too  great to pass up? 

I don’t have the time or resources to research this any further but the moral of the story is to be careful out there avoid those pink sheet stocks!

More on this topic (What's this?)
Pink Sheets - Part I
Pink Sheets - Part III
Small-Cap Pink Stocks
Read more on Pink Sheets at Wikinvest

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Comments on Stock Spam Promotion in Major Financial Publications! Guangzhou Global (GZGT) »

June 5, 2007

Chris @ 12:42 pm

Tate,
This is an excellent blog post with great research into the spam companies/people. IBD seems to be selling out on every avenue and pumping more and more crap from their own basic services. Their basic services are great but why so many extra BS services such as “CANSLIM certified” and dozens of seminar splash pages every time I log-in, etc… I offered to promote IBD and eIBD for an affiliate fee but never heard back. Too bad, I know some of my readers would subscribe. As we talked in private, IBD is missing the blogger boat!

Tate Dwinnell @ 2:01 pm

I completely agree Chris.. outside the immoral advertising decision all the add on services for additional fees are annoying.. Stocks Under $10 for an additional fee? Hmm.. thought that was against the IBD rules.. oh that’s where the money is at forgot. IBD alerts.. great! Another $40/month? hmm… Yes, the services are good but what happened to overdelivering. Don’t even get me started on the alienation of the blogging community. If I were in charge the marketing director would be the first to go.

June 14, 2007

Joe @ 10:19 am

I got a call from a broker I will leave nameless, but he was pushing Cambridge Heart, not on NY Stock Exchange or Nasdaq, but is on the sheet he said. What interested me was he was suggesting that I buy this stock with exactly the money I have in a Bank CD. I never told him how much I had to invest, he just took it upon himself that I would be willing to dump the whole amount in it because it was such a great deal. Since he told me of it, I have been watching it and it’s going down, some investment right?

Tate Dwinnell @ 11:17 am

Oh I’d like to take a call like that! How about just a hint as to the broker.. :)

Sounds like you’re referring to the broker you are currently using and not some cold call so can’t imagine you’d be sticking with them anyway right? Hope not! Thanks for the comment Joe

Not sure how these guys live with themselves. Jumping out of bed, wiping their eyes.. maybe cooking a little breakfast. Ok honey, I’m off to work now. Wish me luck in screwing over as many people as I can!

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