RAYS has been heavily touted by mailers and message boards as being the next (OTCBB:LEXG) primarily because it was being touted by the same promoters. On November 3rd I published and article called, “3 overbought stocks under $5 to consider short” and you bet Raystream, Inc. (OTCBB:RAYS) was at the top of that list.
LEXG if you are unaware, ran from about $1 to $10 before falling almost $8 in one day back in April.
In my article I discussed how shares of RAYS were manipulated by a $3 million dollar plus promotional campaign and how it should be top your short watch list after it cracked -16% last Wednesday October 2nd, 2011.
I even went as far as to write an entire article trying to teach anyone willing to read how you can consistently profit from blatant manipulation by playing both sides of the trade. (Read more on how to short hyped up stocks)
So today as you can imagine it was no surprise to my subscribers and I when out of the blue RAYS dumped for no apparent reason. Shares plummeted starting at 11:00 a.m. EDT and 30 minutes later they were down -38% from $2.46 to $1.52 and is now as low as $1.12 down 55% on the day.
This will no doubt be a hard lesson for unsuspecting traders but once again proves there is no room for ignorance on Wall Street. Anyone willing to search Google and do some due diligence would have found many of my warnings on this stock and more importantly, free tips on how to profit from the pump and the dump.
The message boards were littered with aliases touting RAYS as the next Lithium Exploration (OTCBB:LEXG) because it was being run by the same promoters. I battled it out last week telling them the LEXG promotion was one of a kind and assuming RAYS would do the same was ignorant. I made it very clear RAYS looked ready to crack and come back to earth but my efforts were thwarted by pumpers who resort to name calling instead of facts. (Read how I argued and learn)
Bottom line, small caps get a bad name when unsuspecting beginners jump in trades like RAYS without knowing how to survive these shark infested waters. There is no place for ignorance on Wall Street, especially penny stocks. Small caps can be a wonderful place to trade as my subscribers will tell you, but you need background knowledge to survive and profit from gimmicks like RAYS that take place daily.