I got the following email in almost ALL my email accounts. . .you name it. . . yahoo, gmail, ebay, wharton, stanford . . . every single one. . . this is an incredibly organized and expensive stock manipulation scheme. To buy a big enough list to reach that many people, somebody had paid fortune to make this pump and dump work.
I dont know how many other people got it, but it seems to be a lot. . . here and onTechcrunch. The Techcrunch post is interesting in that its a post from Oct of last year yet it was re-activated with a huge thread regarding this spam issue from people searching for “ikarma” on google or yahoo. Even the CEO came on comments section to defend the company. A lot of the positive comments though, seemed a little planted (IMHO, when they write too much).
So did the pump and dump scheme work? Hell ya. . . The spam started on Tuesday, by Wednesday the stock went up almost 50%. It looks like someone was acumulating a big position before Monday, then waited till Tuesday to send out the spam. A bunch of fools jumped in on Wednesday and Thursday while whoever was manipulating the stock ended up selling all of it after the price popped on Thursday. The selling then spread to the fools that jumped in on Wednesday (buyers remorse) and the stock ended today at a price lower than when it all started on Monday . . . a cautionary tale for sure. . .
The other question is that whether iKarma is involved in this scheme. The huge caveat here is that I have no idea, this is pure speculation. But pink sheet companies are generally pretty sketchy and closely held by a few major shareholders. Many times these comapnies had went through multiple business models, business name, and ticker symbols. Almost all cant even tell you what GAAP stands for.
iKarma, themselves, have been putting out a lot of press releases in the wire hoping to pump up the stock and generate buzz. . . not exactly the best thing to focus on when you are an early stage company. Furthermore, in these press releases, iKarma seemed to be determined to get the attention of day traders by including these keywords: (press releases here)
Keywords: Reputation Management, Financial Advisor, Registered Rep, Securities Broker, Stock Broker, Financial Planner, Trust
Again, sketchy as hell. . . having almost nothing to do with the actual service they are offering. . . Next I did a zoominfo search on the President of the company and got this. . . Not sure if this Pitchford guy for “stockbroker shop” is the same as iKarma Scott Pitchford. BUT if they are the same person, this Scott Pitchford must be pretty familiar with the brokerage industry and how “pump and dump” schemes work. Seems entirely possible that iKarma was built as a a way to sell stock rather than a real service.
I can’t say if these guys personally responsible for the pump and dump or not, but their past behaviour doesn’t seem so innocent. If they are responsible, Techcrunch, news.com, and whole host of journalists/bloggers were unwilling accomplices by helping iKarma raise their profile. Which brings out another question on how much due dilligience bloggers should do before writing about a company . . . in the end . . . with big readership comes great responsibilities. . .
Dear 650,
I would like to assure your readers that iKarma is not responsible for the spam they have been tortured with these past few days touting our company. iKarma.com is in the online reputation business, so you can imagine how angry we are that spammers have soiled our reputation by doing the one thing every internet user in the world truly hates.
Some people have commented that because this spam was “promoting” iKarma that we must somehow be behind this abuse. But by reading this spam in its entirety (with its bogus disclaimer) it quickly becomes clear that this was designed to do us more harm than good. My team and I have invested an enormous amount of money, time, energy and love into the long term success of our company. Putting this at risk to Spam investors for short term gain is not part of our business plan.
We suspect this spam was designed to produce the exact angry response it did in each of those who received it. The spammers even seem to be taunting those who complain by sending additional emails to anyone who responds to the sender. In some cases it appears that they are using the email addresses of complainers as the forged sender on their next spam. Further enraging those most likely to complain. Strangest of all is the fact that the spam even mentioned our membership in an organization that is active in the fight against spam and where I have been a speaker on the subject of building good word-of-mouth.
Our business at iKarma depends on our ability to contact our users without getting blocked. So sending spam is the last thing we would do to promote our company. We also depend on a positive public reputation to promote our brand.
We commend you in your efforts to fight spam and we support the idea that protection of small investors and consumers must take priority over the shame and sadness we feel about having our company name listed on your site.
We regret that this spam has caused everyone (including us) so much aggravation and I hope this letter to you will in some way help redeem iKarma in all of your eyes. We have posted a notice on the front of our web site and we are working with all of our resources to discover who is responsible for this unauthorized abuse.
Sincerely,
Paul Williams
CEO
iKarma Inc.
1203 Town Center Drive
Suite 212
Jupiter, Florida 33458
(561) 427-7285
Comment by Paul WIlliams CEO of iKarma — April 28, 2006 @ 9:44 pm