Modern Stock Promotion

In the 1990s, when a company needed marketing they would fire boiler room / call centers who would cold call doctors and dentists in Iowa to pitch investments. This all shifted to email by the 2000s. Firms would amass masses lists of high income or high networth targets but with email they would just spam everyone. This is when stock promotion started to shift overseas. There are different laws in Europe and what would be illegal here is almost subsidized by local governments in certain countries.

Today, a lot of it is on social media and the game is run slightly differently.

The marketing firm which is usually out of Canada collects a fee from the company but does not directly do the work anymore. They rely on YouTube, TikTok, Reddit and Twitter. What has changed is that there is often no money exchanged between the marketing firm and the social media account holder.

The account holder just is given the stock symbol directly or indirectly and they front run their own followers if they choose.

These accounts are easy to spot.

First, they periodically make a post that says something like “These are great accounts to follow” which cross networks other social media accounts connected to marketers. They often repost this “must follow” tweet.

Usually they account holder is out of Eastern Europe, Cyprus, Israel or one of the Stans. If you click on the “Joined…” link on Twitter and see “West Asia” this generally covers most of those countries. There are a few out of the US, run by foreign nationals. Here is where you can look. As you can see our account is out of the US.

Another tell is the accounts will change names, often many times. Which you can see if click the link to open the full view. If an account has changed names you will see it on this page. We have never changed names.

If the account has it will show this.

The marketing firms are hard to track but if you find one in the US they will have a disclaimer somewhere (usually hidden) on the website. Here is an example:

And if the company hiring the firm is listed in the US, the company will have to disclose the promotion in filings. Here is an example.

I specifically chose POET because that disclosure is very clear what the intent is. That filings is from 2024.

If you use Twitter search to match up the ticker with various accounts you will always find increased bot activity. And you can track the social media accounts that were likely tipped off to the ongoing promotion. I don’t actually think the bot activity is meant to promote the stock but to move that symbol hire in trending so the actual accounts get shown to more users.

In most cases the social media account holder will disclose they own but not declare a position size or if they do it’s almost always in a small account usually as part of a challenge.

If the account owner actually believed in the company they’d buy as many shares as they can. But, this is always sold as an attempt to help people.

Now, this doesn’t mean there isn’t alpha in following these accounts. There can be. I am just providing information for general edification and this landscape has changes slightly in the last year or so.

If this topic is interesting to you I recommend these two books:

Nothing But Money: How the Mob Infiltrated Wall Street and The Money, the Mob and Wall Street.

-AJ