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Rapper 50 cent uses Twitter - makes $8.7 Million in the stock market in one day

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cbdo2007 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:35 AM
Original message
Rapper 50 cent uses Twitter - makes $8.7 Million in the stock market in one day
Jan. 10-16: 50 Cent Uses Twitter To Make $8.7 Million In One Day

Rappers have been known to influence interest in fashion trends, alcohol brands, and luxury automobiles. This week hip-hop mogul 50 Cent added the stock exchange to the list..

In just one day, 50 Cent's promotion of the publicly traded H&H Imports, Inc. raised the company's stock price from .10 to .39 per share..

The G-Unit head urged his 3.8 million Twitter followers to invest in the company. "TVG's stock went from 5 cent to 10 in one day," 50 wrote about the subsidiary of H&H. "You can double your money right now. Just get what you can afford.".

50's fans responded immediately, purchasing $50 million worth of the penny stocks. The New York rapper made $8.7 million from those exchanges.

http://new.music.yahoo.com/blogs/thatsreallyweek/130325/jan-10-16-50-cent-uses-twitter-to-make-87-million-in-one-day/
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Rochester Donating Member (486 posts) Send PM | Profile | Ignore Mon Jan-17-11 11:37 AM
Response to Original message
1. Pump and dump much?
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Javaman Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 03:24 PM
Response to Reply #1
14. If you bothered to read the article. 50 cent held on to the stock and took a hit as well...
if he pumped and dumped he would have been in colossal legal trouble.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:38 AM
Response to Original message
2. Some securities violations there.
Edited on Mon Jan-17-11 11:38 AM by Statistical
A solicitation to purchase stock is a criminal offense. The sad thing is he is pathetically bad about it and has left a "paper" trail making his guilt all but assured.

Also many of his fans have lost up to 30% following his advice.. H&H has dropped back from .39 to .28.
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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Mon Jan-17-11 03:18 PM
Response to Reply #2
12. Deleted message
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 04:11 PM
Response to Reply #12
24. True I spoke imprecisely.
He made a solicitation without disclaimer or risk and using misleading or factually inaccurate statements.

When you combine that with the fact that he is a 15% major shareholder and he is further restricted on what he can legally do he is likely facing a fine at a minimum.
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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Mon Jan-17-11 05:28 PM
Response to Reply #24
27. Deleted message
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rfranklin Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:39 AM
Response to Original message
3. Hello SEC?
This sound totally illegal.
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janedum Donating Member (374 posts) Send PM | Profile | Ignore Mon Jan-17-11 11:53 AM
Response to Reply #3
9. Pump n'Dump. SEC to fine his ass BIGTIME!
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cbdo2007 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 12:09 PM
Response to Reply #9
10. He didn't dump. He's still got all shares, so yes...
technically he didn't "make" $8.7 Million, his stock price just increased by that much, but also technically he didn't do anything wrong I think.
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ThePhilosopher04 Donating Member (435 posts) Send PM | Profile | Ignore Mon Jan-17-11 03:33 PM
Response to Reply #3
15. Sounds like free speech to me. NT
nm
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 03:34 PM
Response to Reply #15
16. Is fraud, libel, and call to violence also protected speech. n/t
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ThePhilosopher04 Donating Member (435 posts) Send PM | Profile | Ignore Mon Jan-17-11 03:45 PM
Response to Reply #16
20. Not "fraud or libel" or even close...
if he represented himself as someone qualified to give investment advice and solicited fees, then yes, he would in hot water; but this is nothing more than a guy promoting his company...nothing illegal about it and totally protected speech.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 03:55 PM
Response to Reply #20
22. I didn't say it was simply indicated there are limits to free speech
Edited on Mon Jan-17-11 04:22 PM by Statistical
What he did was make solicitation for investments with false or misleading statements and lacking proper disclosure of risk which is not protected speech.

"You can double your money right now. Just get what you can afford."

Now many companies are very shady (especially the ones pumping gold) but they carefully parse their words to ensure it barely stays on the good side of the line. His words are clearly misleading. No indication of potential risk, at best a misleading statement.

The article also mentions he received 30 million shares. Google finance lists the H&H Import as 200 million shares outstanding which makes his ownership roughly 15%. Once you obtain 5% ownership in a company you are subject to even more restrictive regulations. At a minimum he is required to disclose his position to potential investors to avoid a conflict of interests.

What he did is a securities violation not protected speech.
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superduperfarleft Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 04:17 PM
Response to Reply #15
25. Um, no, actually what he did is VERY against the law. n/t
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Canuckistanian Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:39 AM
Response to Original message
4. Amazing
So what the article is saying is that people with influence can artificially inflate stock prices, making millions for themselves as well?

I had no clue this was happening.
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Overseas Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:41 AM
Response to Original message
5. K&R ! //nt
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Zephie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:42 AM
Response to Original message
6. Buy pennies!
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lonestarnot Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:42 AM
Response to Original message
7. whoopsie.
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Lucky Luciano Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 11:47 AM
Response to Original message
8. Holy Crap! Completely illegal! That is jail worthy! nt
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WinkyDink Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 12:13 PM
Response to Original message
11. It was a Tweet, not a command from some imperial power.
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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Mon Jan-17-11 03:19 PM
Response to Reply #11
13. Deleted message
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Javaman Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 03:35 PM
Response to Reply #13
17. Isn't it only illegal if the person promoting the stock is also a broker?
Edited on Mon Jan-17-11 03:36 PM by Javaman
aka insider trading?

what he did wasn't the most ethical thing in the world, but it wasn't illegal.

It's no different from me saying buy such and such stock because whatever. You can either take the advice or not.

However, if I dump the stock when it reaches x amount, then it is illegal.

Because 50 cent, while being a music celebrity, is a private citizen, with no connections to the trading industry other than his investments, nothing he did constitutes a violation.

However, again, an argument could be made that because he is in a special position in society, due to his fame, he could have undue influence upon a particular stocks success by saying publicly that people should buy such and such stock.

Trying to prove that the public, which has the power to say yes or no, that they were unfairly duped into buying said stock would prove to be difficult. And if a case is made and a sentence is handed out, it would have massive ramifications.

But since 50 cent is neither a licensed broker or investment analysis, he is free and clear from any problems resulting from this as he didn't dump his stock.

In other words, there are suckers born everyday. And if his followers choose to take investment advice from someone who is not licensed, that is their problem. Not his.
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AlabamaLibrul Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 03:41 PM
Response to Reply #17
19. Not at all, a 15 year old got busted back in the day for his activities.
And, interestingly enough, he still got to keep half a million dollars of it - and still sends out bullshit "investment alerts" or whatever.

http://www.lebed.biz/
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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Mon Jan-17-11 03:48 PM
Response to Reply #17
21. Deleted message
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Javaman Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 07:10 PM
Response to Reply #21
35. I have been schooled and I bow to your greater knowledge.
:)

Cheers!
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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Mon Jan-17-11 07:41 PM
Response to Reply #35
36. Deleted message
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 04:00 PM
Response to Reply #17
23. Not true. He is a major owner.
Edited on Mon Jan-17-11 04:17 PM by Statistical
Article indicates he owns 30 million shares. The company has 200 million shares outstanding which makes him a "material owner". The SEC places more restrictive regulations on persons owning more than 5% of any publicly traded entity. Failure to disclose a position to potential investors in a solicitation by a material owner is an SEC violation.

Lastly it isn't just the dump that makes pump and dump illegal it is the solicitation without full disclosure. If/when a persons sells or not isn't material. I mean imagine how complex that would get. 50 cent will sell eventually. When he finally does sell will it be illegal then? Only illegal if he makes a profit? He solicited investors without disclosing risks and by making misleading or false statements. That is a securities violation. The fact that he is a 15% owner only makes it a larger securities violation.
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 03:39 PM
Response to Reply #11
18. It was a solicitation, matters not the format of same.
Solicitations are illegal, says upthread.

Still, it will be interesting to see if SEC goes after him.
If they do, it will define the level and size of criminality that SEC does NOT pursue.
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superduperfarleft Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 04:18 PM
Response to Reply #11
26. You're right. And it's also probably against the law.
Of course, I'm sure Curtis is just too stupid to know that as opposed to breaking the law intentionally.

Sounds like he's about as good a stockbroker as he is a rapper.
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Odin2005 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:02 PM
Response to Original message
28. This is SOOO totally illegal...
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spanone Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:06 PM
Response to Original message
29. smart rapper/if it's illegal, the feds don't have far too look.
Edited on Mon Jan-17-11 06:07 PM by spanone
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WinkyDink Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:09 PM
Response to Original message
30. Let me know when he's arrested. As in: Not going to be.
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NoGOPZone Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:19 PM
Response to Original message
31. I guess several in this thread are posting without reading the article
Edited on Mon Jan-17-11 07:12 PM by NoGOPZone
There's a link to an Esquire article which identifies and extensively quotes a securities professor at Yale Law School who doesn't believe anything illegal was done.

on edit: here is Esquire link

http://www.esquire.com/the-side/feature/50-cent-stock-picks-4847777#ixzz1B3h0Ha9d


another quote from Rick Sauer, a former Securities and Exchange Commission attorney who wrote the book "Selling America Short

"It's probably OK unless he knew the stock was bad and touted it anyway, which is hard to prove."


http://www.propublica.org/article/what-do-50-cent-carmen-electra-and-shaquille-oneal-have-in-common-theyve-al

We'll know soon enough if the SEC will pursue this
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rug Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:22 PM
Response to Original message
32. Yeah but it sold for 39 cent not 50 cent.
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Warren DeMontague Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:26 PM
Response to Original message
33. I give him credit for figuring that out without having to get a Harvard MBA, first.
Honestly, isn't this the sort of good old fashioned American Ingenuity we should be celebrating? :rofl:
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Junkdrawer Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 06:54 PM
Response to Original message
34. 50 cents will be offered a seat on the board of TV Goods, a subsidiary of H&H....
CLEARWATER, FL -- (MARKET WIRE) -- 01/06/11 -- H & H Imports, Inc. (OTCBB: HNHI), the parent company of TV Goods, Inc., previously announced that it had acquired the worldwide marketing rights to a new line of Sleek Wireless Hybrid and Tunable audio products. In a further development, the company announced today that this new line of mobile audio products will be personally endorsed by Curtis Jackson, p/k/a "50 Cent." 50 Cent, through G-Unit, a company owned by Jackson, has an ownership interest in Sleek. Under its Agreement with Sleek and G-Unit, TV Goods also made an equity investment in Sleek. 50 Cent, through G-Unit, has also made an equity investment in TV Goods, which makes him a significant minority shareholder in TV Goods and will be offered a seat on the Board of the Company at a later date.

....

http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-201101061600MRKTWIREUSPR____0705672-1ms=timestamp||01/06/2011%204:00%20PM%20ET||headline||Rap/Business%20Mogul%20%2250%20Cent%22%20and%20Sleek%20Audio%20Team%20With%20Kevin%20Harrington%20of%20ABC%27s%20Shark%20Tank%20and%20TV%20Goods%20Chairman%20to%20Capture%20Share%20of%20Mobile%20Audio%20Headphone/Earbud%20Market||docSource||Market%20Wire||provider||ACQUIREMEDIA||realtedsyms||%7CUS%3BHNHI&ticker=HNHI:US
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