If you’re playing poker or near a three card Monty stand in New York City and don’t know who the mark is, you’re the mark. That’s exactly the same frame of mind that investors must be in when they see most foreign based Nasdaq listings or the shysters are going to walk away with your money.
In lieu of the human props and carnival barkers, foreign based Nasdaq listings use the premarket to artificially pump up their listings, so that they can dump inflated priced shares on unsuspecting American mom and pop retail investors.
As soon as I heard all the buzz words, the hair on the back of my neck began to stand up. “Chinese stocks are good again,” read one headline, “Biggest squeeze ever,” touted another; like they were imagined in a South Park Episode with Stan Marsh leading a short squeeze protest.
I’ve been trading stocks for more than 20 years and learned a lot about the markets, like how you can be right and wrong at the same time. Yes, that often happens because a Company’s fundamentals can decouple from the listing’s pricing technicals. While that’s, usually, a temporary phenomenon, momentum can often trump any investment thesis (Bitcoin). So, whenever Canadian, Israeli, or Chinese Nasdaq listings are running in premarket, there are way too many reasons to pass and, unless you’re a skilled momentum trader, no reasons to even consider trading.
(NASDAQ: MEGL) MAGIC EMPIRE LIMITED, which sounds like it’s competing with Shitty Chicken (yes, forgive me, another South Park reference), rose from around $11 to $249.94 in one day, but is now trading at $13 and the $4 per share stock offering says that it’s going much lower.
(NASDAQ: AMTD) ran from $1.01 to a high of $12.90 and has now fallen to $2.42 a share. The 5-day chart on this is brutal and leaves nothing to smile about. The company has not put out any news to help stabilize the stock or calm investors, and this one appears to be going lower.
And of course (NYS: HKD) which soared from $12. All the way to $2,500 plus. This stock is now trading at $212. And well you can see the losses piling up for anyone who followed into these situations and held them.
I’m all for making money and love a good short squeeze, but I learned the hard way, too many times, that “just because you can do something, doesn’t mean you should,” and the consequences of making this mistake could range from wiping out a family’s savings to worse.
Please stay away. Winning at a street hustle, like 3 card Monty, is even difficult for hardened students of the game.
I’m not joking when I say that these listings are nearly as bad as fentanyl and my sympathies go out to anyone still holding these, because hope is not a trading strategy.