A penny stock tied to a little-known bitcoin company and a slew of WhatsApp spam messages were at the heart of a pump-and-dump scheme last week.
As reported by The Awl, WhatsApp users received messages on 21st August stating that traders from major Wall Street investment banks including JPMorgan, Morgan Stanley and Goldman Sachs were about to buy stock in Avra, Inc (OTCQB: AVRN), a company that, according to its website, sells bitcoin ATMs and point-of-sale solutions.
Pump and dump spam on WhatsApp? pic.twitter.com/3BCVnIzHNC
— Noah McCormack (@noahmccormack) August 21, 2015
The messages indicated that the price would see major gains, and in one instance, claimed that a buyout would happen soon.
The stock price quickly shot to a high of $1.26 before falling significantly, though it’s unclear exactly how many WhatsApp users fell for the scam.
Whatsapp spam for pump and dump scheme. Ain’t technology grand! pic.twitter.com/tW9PYqCGi2
— Patrick Delaney (@pxdelaney) August 21, 2015
The messages mostly drew complaints from users, who cried foul that they were receiving any spam at all. At least one user on Reddit indicated that they had reported the incident to the SEC.
Heavy trading volume for Avra’s stock continued days after the spike, according to data from Google Finance.
The event raised questions about the company’s financial prospects based on public data filed with the US Securities and Exchange Commission.
For example, HotStocked.com noted that, according to the company’s SEC 10-Q filing for the period ending 30th June, Avra has reported no revenue since it was founded in December 2010. The company reported roughly $25,000 in cash on hand versus about $245,000 in liabilities.
At press time, Avra’s stock is trading at approximately $0.23.
The company did not immediately respond to a request for comment.
Penny stock image via Shutterstock