
50 Cent Tweets, Tiny Stock Soars - rwhitman
http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post=c00e87b0-01a3-435e-8638-549e5d55170c?gt1=33009
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fleitz
Right now 50's lawyers are telling the SEC that he will never do this again
and apologizing profusely in efforts to at least stave off a trading ban and
more likely avoid jail.

The death knell for 50 in these tweets are explicit instructions to take a
position in the stock, guarantees on returns, the normally low trading volume
on the stock, and of course the undisclosed position that 50 had in the stock.
It's basically a recipe on how not to promote a stock. Doing your own IR is
about as smart as being your own lawyer.

Slinging stock is somewhat similar to slinging rock in that there are a lot of
things you can do which will land you in jail. 50 should know better than
this.

~~~
prs
All that trouble for ~$10M in paper profit. Compare this to the $400M he seems
to have netted from his investment in the drinks company Glaceau a few years
ago.

<http://www.guardian.co.uk/music/2007/may/29/news.50cent>

~~~
fleitz
He seemed to be a pretty savvy investor.

That's also one of the worst points about what he did, with his portfolio and
status as an accredited investor he's not going to get much leeway for not
knowing this was illegal.

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rwhitman
I posted this because my first web client was a journalist for the WSJ who
went to jail in the 80's for insider trading, doing a similar scheme of buying
stock in a company before he wrote a financial column about it. Paper comes
out, stock soars and then makes a boatload.

I don't know much about the market, but isn't this essentially the same
scheme? And if that was considered insider trading, wouldn't pump & dump on
Twitter be just as bad?

This is what I'm referring to:
<http://www.bizjournalismhistory.org/1980_1984.htm>

~~~
sosuke
So I can't make a post about how awesome the company I have stock in is and
profit from it? I thought I just had to disclose that I was a owner of that
stock to avoid problems.

~~~
rdtsc
There was similar case where someone would verify the academic credentials of
CEOs of publicly traded companies in order to discover fraud and
misrepresentation.

After discovering a flaw, he would short the company's stock, then go public
with the news.

I maybe mistaken, but I believe that was not considered insider trading and
his methods were a valid way to invest and make money. I think that is quite a
brilliant strategy.

~~~
brown9-2
It can't be insider trading if you don't have any information from "inside"
the company.

~~~
rdtsc
You are right. I used the term incorrectly, I meant it as a blanket term for
all investment fraud.

------
user24
In response to the auto-playing video advert on that page:

I have nothing wrong with advertising on the web, I'm not against
commercialisation of the web. I fully understand that the economics of the web
require that we trade easy cheap access to information for small portions of
our eyeball-time, but the recent trend towards full-screen interstitial advert
pages, large banners hovering over content and autoplaying audio/video
adverts, as well as the not-so-recent rise of multi-page articles to inflate
CPM impressions is _really bad_ for the web, and to me heralds a return to the
bad old days of popups and shoot the monkey adverts from the 90's. We don't
need to reward this with pageviews.

I know the alternative many will suggest is adblock, but that option is
equally as damaging - it hurts content providers as much as gratuitous
advertising hurts content consumers.

So please, disable adblock, and next time you find a page carrying an
interesting story but with unacceptable adverts, find another source[1] to
share, or downvote/flag it.

The web doesn't need this.

[1] - <http://www.google.co.uk/search?q=50+cent+stock>

edit: I mean: It's a web, a network, in which we exist, and it would be great
to reach an equilibrium where people producing content can get paid, and
consumers can not get treated like cattle. The alternative is an ever-
escalating war between advertisers and advert blockers, which ends up with no-
one having a financial incentive to produce great content...

Although as I say that, I realise that the incentive for creating my recently-
popular genetic algorithm hello world thing [2] wasn't financial at all. So
maybe fuck it just block the damn ads. Hmm. Your thoughts?

There are a great many people who are professional bloggers though, and I
think the advertising model really is key to the web - we just need to find a
way to make it mutually beneficial (without encouraging click-fraud). Really
the ball is in the advertiser's court, but somehow I think they're in it for
short-term gains rather than the long-term well-being of the web.

[2] [http://www.puremango.co.uk/2010/12/genetic-algorithm-for-
hel...](http://www.puremango.co.uk/2010/12/genetic-algorithm-for-hello-world/)

~~~
sgrove
The auto-playinf video advert is actually an auto-playing video report of the
50 cent stock issue. It just happened to have an advert before it, as web
video is wont to do.

~~~
user24
then they're hurting themselves as well as me.

Hurting themselves by putting up a barrier between eyeballs and their content.
I mean it's such a silly short sighted pattern. "I know, we've a really
popular village noticeboard which people have come to trust and tell their
friends about. Let's put a layer over the noticeboard with adverts that you
have to lift up before you can see the actual noticeboard underneath. Soon
we'll be rich!". Which they will be, but after 3 months everyone in the
village will get wise and stop looking at the noticeboard. And then the
noticeboard will be covered in spiderwebs and hornets nests and everyone in
the village will have to have their houses fumigated and eventually the
noticeboard will be burned down, but the fire will spread and their fumigated
houses will also burn down because of the chemicals and so on.

I've seen it happen a hundred times. When will people learn!

~~~
dhbanes
Sorry, but the fact is obtrusive advertisements like this work. Most people
out there don't think like HN readers.

~~~
tdoggette
They work in that apparently advertisers pay to have them inserted. I dunno if
they work in that people watch them.

------
DanLar75
50 Cent falls to $0.39 on rumors of Jail time :-)

------
hristov
It is going to be fun watching the first SEC enforcement action based on
tweets. It is also going to be fun watching securities lawyers try to create a
valid disclaimer that fits in a tweet.

~~~
fleitz
disclaimer.ly? The service that shortens disclaimers.

~~~
ianferrel
disclaim.er?

It's time for Eritrea to join Tuvalu (.tv) on the TLD money train!

------
jordan0day
Does anyone know what law firm represents 50 Cent, and how I can get some
shares in it? Talk about easy money!

~~~
eru
Shouldn't you be shorting it? If they can't keep him from doing something that
stupid, then they haven't coached him right. (Even if they'll rake in some
money now, defending him.)

~~~
nickpinkston
"keep him from doing something that stupid"

I think 50 is going to do what he wants - law firm not withstanding...

------
fleitz
This sounds like insider trading / pump and dump fraud. I don't think a safe
harbor statement regarding forward looking statements would even fit in a
tweet.

------
nickpinkston
I can feel the down votes, but does anyone else think that insider trading
(not saying this necessarily is) should be legalized?

My reasons:

\- The information current SEC disclosures release is well known to be a
(legal) 2nd set of books that has every interest in painting a rosy picture.
\- If gaps in information could be narrowed quickly (i.e. from insider
knowledge), stock prices would reflect the realities quicker and best. \-
Large stock manipulation can't come from people who don't have money to move
markets, but info almost always will come from non-traders. This means they
traders would be willing to pay insiders for knowledge to trade on the info -
doubtlessly using a contract so the knowledge would be legit. \- If a company
isn't treating their employees well (pay, moral, etc.), and has many skeletons
in the closet: it would be at risk from insiders trying to take advantage of
such a scheme.

Back to 50: BBuffone, below asked what the difference between plugging Vitamin
water and stock is - I say that the difference is only an artificial one.

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bl4k
"Man, making money like this is sooo easy it should be illegal!"

"ah, Mr Cent.."

------
citricsquid
I saw comments in an article here on HN a few days back talking about what 50
did. Some speculated that he could be reported for it and possibly legally
challenged, is this correct, has be broken the law?

~~~
catnip
It's low level pump and dump, CNBC does it every day so he should be fine.

~~~
prs
CNBC does not directly benefit financially from price increases in stocks they
cover. In this case, Mr Jackson (50 Cent) has a financial interest in the
company and does participate in stock price gains - That is where I see a
_significant_ difference.

------
gammarator
Is 50 having tough times? A couple of weeks ago he was asking his Twitter
followers for $100 to shovel the snow off their driveways:
[http://nymag.com/daily/entertainment/2010/12/50_cent_shoveli...](http://nymag.com/daily/entertainment/2010/12/50_cent_shoveling_snow.html)

~~~
Detrus
He was just setting an example for people

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growt
This is the perfect plot for a dilbert comic:

pointy haired boss: "welcome our new financial advisor: mr. 50 cent."

dilbert: "I don't see him"

pointy haired boss: "oh, we just follow him on twitter, it's cheaper that way"

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jarin
The article says it's unclear what the company does, but after reading 50
Cent's tweets the other day I looked into it and it seems like they have the
marketing rights to 50's new line of headphones: <http://sleekby50.com/>

_Disclosure: I do not own any shares of HNHI_

Edit: Looks like he also has a sizable stake in Sleek Audio as well

------
bbuffone
Someone should tell him the different between pumping a product like "Vitamin
Water" and making $400 million and pumping a stock and going to prison.

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grammr
+240% because of a tweet? I don't think I've ever seen a better opportunity
for a short.

~~~
trotsky
Shorting a microcap/penny that's involved in a pump and dump is exceedingly
risky. Not only have they proven they can manipulate the stock to great
heights, but shorts also represent a guaranteed sale even at prices no one
else will touch if they can force you to cover.

If you know you're riding the "dump" phase down then you're all good, but the
last thing you want to do is be at cross purposes with the manipulators.

~~~
chipsy
Not to mention the fact that it's hard to get short shares of a penny stock as
a commercial investor, and once you have them, you face the same low-liquidity
problem that everyone has in that market.

Pennies are a market that are slow(few trades) and fast(massive price swings)
at the same time. The people that play them seriously wage a war of
information, and sit around waiting for every tick all day, posting on forums,
trying to discern the actors and their intentions. And it's frighteningly easy
to deceive oneself into following pumper's tips, like those 50 gave. It just
has to be heard from someone you trust, at a vulnerable moment.

------
chopsueyar
Thug life!

Pump and dump. No excuse.

