Check out Cyr’s blog. He has lots of interesting posts (and comments) on this subject. I didn’t realize that there now seem to be professional penny stock “promoters” who will promote your stock, and only charge you based on the results.
One comment I saw asked, “If spam predictably boosts prices fo a day, why don’t people just short the stock and take advantage of it?” My response: most brokers will not let people short stocks that are not traded on an exchange, or have a price below $3-$5.
This is one way in which short trading restrictions hurt the overall market. If it were easy to short these stocks, spammers would be able to make a lot less profit from these techniques, and they would decline to a much more manageable level without any enforcement by authorities: the market would police itself, with traders using the spam as a tip to sell instead of buy, keeping the stock price more in line with what it would have been without the spam blitz.
Another related article….