[patio11]

It's almost certainly a pump and dump operation or a target of opportunity by a pump and dump operation. Assuming it doesn't get delisted by the SEC first, it will continue for a few days and then suddenly lose 98%+ percent of that valuation in a matter of hours.

Edit: Yep, see their financial statement. https://www.otciq.com/otciq/ajax/showFinancialReportById.pdf... It's even worse than you would otherwise think.

[api]

Another possibility is some kind of money laundering scheme. I've heard rumors before of money laundering techniques where you basically sort of commit financial fraud against yourself using sock puppet shell companies or other entities, allowing clean-money-side sock puppets to book gains at the expense of dirty-money sock puppets.

[tim333]

The total assets $39 bit is quality

[waterlesscloud]

I dabbled with pink sheets back in the late 90s. I had a little circle of friends online that I worked with to research the companies. We'd call up the companies and quiz their investor relations people, find everything we could on the backgrounds of the principals, and so on. That only goes so far though, and we narrowly dodged a bullet with a company that had like $140 in their checking account.

That whole world is so strange. It's kind of fun, in a way, but it's super risky.

[StavrosK]

I'm not knowledgeable when it comes to the stock market, but can't you short these guys and make lots of money?

[owenmarshall]

You have to borrow stock to short it. The only person that owns worthless penny stock that's being pumped & dumped is the pumper and dumper, who will act to inflate the price more.

Stay far away from scams.

[mechanical_fish]

Highly recommended reading if you are ever tempted to take advantage of an apparent scam in progress: David Maurer's The Big Con, the hundred-year-old story of swindlers who stole tons of money by setting up fake stock scams, then luring bystanders into placing side bets on the scams-in-progress.

(This is the book that inspired the 1973 movie The Sting, but it's nonfiction.)

People still fall for the classic cons. Don't be one of those people.

[michaelochurch]

I'm not the one who came up with this quote, but it's a good one: the market can stay irrational longer than you can remain solvent. If you short it, and it triples in a day, you get hit with margin calls (put more money in the account, or close out in a loss). Margin calls are terrible things to have happen to you. They typically mean, "you lose a lot of money making bad trades where you have no choice in the matter". The meltdown of 2008 was heavily powered by margin calls creating a cascading failure that, while it started in the mortgage-backed derivate market, spread into a much larger set of financial markets.

People went bankrupt shorting the NASDAQ at 3000 in the '90s. They were right, but it didn't matter. Margin calls are bad.

Then, there are the hard-to-borrow stocks (people know it's rotten, and it becomes expensive to short it) and various edge cases that are resolved based on relationships (i.e. out of your favor, unless you sucked the right dicks in MBA school) and while those relationship-oriented, obviously-inefficient corner cases almost never happen with decent liquid stocks (for which the Efficient Market Hypothesis is close to true, unless your timeframe is microseconds) they happen all the time with shitty penny stocks.

[fleitz]

Yup, Timothy Sykes is a former penny stock promoter that does exactly that