Rapper 50 Cent, real name Curtis Jackson has taken to his Twitter account to sell penny stocks. He has been advertising H & H Imports(HNHI) which the New York Observer claims is a “sketchy penny stock.”
Later 50 Cent would Tweet
“I own HNHI stock thoughts on it are my opinion. Talk to financial advisor about it.”
“HNHI is the right investment for me it may or may not be right for u! Do ur homework”
Since many sub $1.00 stocks are thinly traded, and especially those that trade for fractions of one cent, they are targets for price manipulation. For example, an individual or organization buys up hundreds of thousands, or even millions of shares, then uses web sites, faulty press releases, and e-mail blasts to drive interest to the company. Very often, faulty or misleading information is provided, resulting in investors buying shares in the underlying company. The increased demand pushes the price up, while the original individual or organization doing the “pumping” sells their holdings. The expanding use of the Internet has made penny stock scams easier to perpetuate.