The Pump 2021: 4 Juniors Playing with Fire
11th October 2021
Today I wanted to drop a little note about staying safe in the digital miningverse, in the hope you’ll pass it along and everybody will end the day with a broad smile.
I have 2 short examples for you from the week of illegal activity on Twitter regarding stock promotion, both are designed to trick and mislead investors and one is a lot more clever than the other!
Lets start with our good friends at Conquest Resources ($CQR). We’ve been happily working with Tom, Frank and the CQR team for most of 2021 and we like their story, drills are turning, and results are coming in (as fast as the Canadian labs can manage them).
A few weeks ago however, their stock was ‘hijacked’ by a group called ‘Millennial Capital’ who tricked the CEO into interviews and meetings and then proceeded to misquote and spread false/excessive information about the company, causing an unusual stock rise.
The +186% in a day was so sharp and unrelated to news or market conditions that it had to be reported to IIROC & investigated. The exchange rightfully pushed for information on the people involved and caused a bit of paperwork hassle. So, I went digging into ‘Millennial Capital’ as we didn’t want to be tarred with the brush of such dirty work and we wanted to know how to ensure CQRs official accounts remained compliant, despite illicit activities elsewhere.
What we found behind this group was a really badly managed and incomprehensible series of twitter profiles, in the hundreds. The profiles simply use automated/fake names and unbelievable stories about trading riches and promises of instant success… They rarely use correct English or reference any claims at all but focus on a lot of ‘to the moon’ and ‘we’re going 400% here’ claims.
This digital scam network communicates with itself in an internal loop, I assume it’s one Middle Eastern guy (an assumption entirely from the profile’s route names) in his mum’s basement tweeting himself, until somebody gets reeled in.
It’s a little like the cup & ball scam you see on European streets, somebody posing as a member of the public will come and win loads of money gambling, but when a stranger joins the game they get instantly fleeced and the poser and host walk away sharing the stranger’s money.
Now, to me, the profiles look so obviously fake that we automatically mute/block them from our feeds at spotlight. But I’ve spent 6 years as a media analyst in mining so, these things stick out quickly to me, apparently not everybody is this deep into Twitter analytics!
The claims in these looped tweets are clever, hinting at a ‘likely Kirkland Lake buyout’, saying ‘the CEO has guaranteed 400% returns’ etc. and it appears as if everybody in the loop is buying together, as a community. They’re clever and encourage buying, but false and managed by one person, not an investing community. One must assume this single person bought in at the all time low the stock dipped into for a day or two, then dumped it again after running it up.
It would thus be completely illegal for CQR to have any involvement with these channels. Luckily Tom Obradovic (CQR - CEO) did the smart thing and reported this to IIROC before we’d even noticed it and the company remain squeaky clean, but if they had signed any agreement, or engaged ‘Millennial Capital’ for this work, they’d now be looking at a significant fine for publishing misleading information without appropriate disclaimers and a serious loss of face for those on the board about compliance breaches. Also, those naïve investors who bought the stock would be in a reasonable position to personally blame Tom for their losses, as he’d supposedly guaranteed those statements.
That’s the one that looked glaringly obvious to me, the next one is same-same-different and I’m yet to get to the bottom of the network and see who’s behind it, give me a few more days of tracking activity! It seems to link around to a company called ‘IR Outsource’ but this is also an alias so, we’ll get deeper soon.
3 companies are currently implicated here which makes joining the dots easier, but just like with CQR, I’m not sure if they’re involved intentionally, or if they’re victims unwittingly so, please don’t judge them until the full trial ends! Social media is more of an art than a science and we do get things wrong…
$HM Hawkmoon Resources, LKY Lucky Minerals and $GOT Goliath Resources, all in Canada.
This pump network on this is run by somebody far better educated than ‘Millennial Investor’, they have crafted clever personas and also bought old profiles (yes, you can fake the joined dates) to look convincing, which is a shame, because for all their hard work, they’re not as effective as the outright lies and nonsense at the former group!
How do we spot these fakes? 3 pointers…
You can spot the route channels as fake by scrolling back through followers, its clear this was a young e-sports profile and only recently deleted all past posts and started posting mining and TSX news.
Secondly, every single one of the personas attached to this group logged into Twitter and reposted/liked a post from GOT, HM & LKY at the same time, every time. So, there are at least 15 accounts we’ve identified, probably more, creating this same false loop of engagement to trap the less wise inside, managed from the same single source.
Here’s two examples that are always involved, stock photo profile image is a giveaway and also pinning of that GOT post is common across 1/3 of these channels, the others having LKY/HM pinned. Clicking on ‘Eddie’s’ followers shows where the owners of this loop have made an error cleaning their trail, they followed themselves, so they’re essentially all listed for us to dig out.
All of these fake personas also decided to get into hemp during the same day a month ago, fairly crazy coincidence eh!?
Same again for ‘Naomi’ new account, stock photo, same following of fake accounts and same pinned posts from the same pinned times, Hemp posts month ago. Another fake.
Why does this all matter?
It’s the law…
Recently the TSX & ASX both changed rules regarding compliancy of data and company posting on social media. Companies are now responsible for social media posts and content as much as they are for formal news releases, Tweets should be treated with as much care as NRs.
It’s the right thing to do…
Allowing these scam loops to continue means we’re complicit in allowing new investors or those less savvy online to be scammed, mislead and abused. That doesn’t sit well with me.
Companies are being ripped off…
IR firms and newsletters are claiming to have tens of thousands of subscribers and millions of engagements, but only a fraction are real, some groups are running up their own stats from their own loop profiles. Based on average engagement stats, log-in times and some cheeky tracking I think there are really very few, maybe <1000 genuine junior mining investing accounts active on Twitter. So when somebody has 20k followers, ask who they are and why you’d want to talk to them. Also, would you rather get engagement from 10 known investors, or 20k fake profiles…? Only one of those routes can lead to stock buying.
How can we stop this…?
Educate the unfortunate souls who are buying stocks based on tweets. Before investing you need to go to official websites, phone companies, scout their land on google earth, stalk their geologists for juicy info on LinkedIn etc… You need to get your own set of genuine information. There is no ‘get rich quick’ solution in mining stocks, which is what many newcomers want and hope for. Success is about time and knowing more than the others placing orders. Twitter is a superb resource if you know how to use it, but it’s also a hub for thieves and con artists to peddle their wares, just like Reddit.
How can you trust us…?
Spotlight are a fully exchange compliant service provider with qualified geologists reviewing our content and clear labelling of our sponsored content. Everything we release will always have our logo or name on it, we don’t need to hide behind fake profiles and scam people because we’re really good at what we do honestly… We pick and support companies who have real exciting stories, who don’t need embellishment and tricks.
You can hassle us, question our work and come meet us in person! We are physical, fleshy humans and thus accountable for what we write, unlike ‘OTC Chairman’, ‘Eddie’ or ‘Naomi’ above, who you are very unlikely to wander past at a conference.
Stay safe friends and have a wonderful week,