Selling stocks on Twitter - Macleans.ca

Selling stocks on Twitter

Did 50 Cent nearly get away with a 140-character pump and dump?

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It had almost all the markings of a pump and dump scheme: rapper 50 Cent encouraged his 3.8 million Twitter followers to invest in a penny stock, causing H&H Imports to jump by 290 per cent over two days, and resulting in a paper profit for the music star of some US$8.7 million. “You can double your money right now,” he wrote. “Just get what you can afford.” With 50’s blessing, shares in the Florida-based company soared to 39 cents each from 10 cents. He later deleted the tweets about the stock, which trades as HNHI, and replaced them with more moderate words: “I own HNHI stock. Thoughts on it are my opinion. Talk to financial adviser about it.”

Shortly after those final words, the H&H share price dropped to 25 cents, leaving critics to wonder whether 50 used his Twitter influence to artificially increase the value of a stock for its shareholders’ benefit. So far, it appears the 35-year-old rapper (whose real name is Curtis Jackson) has avoided violating securities laws because he has not sold any of his H&H stock. The U.S. Securities and Exchange Commission declined to comment about whether they’d investigate. Still, questions remain about what constitutes a 140-character pump and dump.