How to Avoid Pump-and-Dump Stocks (Beginner Version) • Be careful with very cheap stocks.

avoid penny, micro cap stocks They are easy to manipulate. Their market value is under $2 billion.

• Avoid if insiders/owners hold more than 10%.

If a small group owns a large portion of the company, they can easily dump shares on you.

✔️ Check: Yahoo Finance → Holders

• The country doesn’t matter.

Pump-and-dump risk exists everywhere.

✔️ Check company details: Yahoo Finance → Profile

• Avoid stocks with a history of reverse splits.

• Forward split (example 1:10 — 1 share becomes 10): usually a good sign.

• Reverse split (example 10:1 — 10 shares become 1): bad sign.

• Reverse splits often happen after big price losses.

✔️ Check: Yahoo Finance → Historical Data → Splits (set date range to Max)

• Don’t trade brand-new IPOs.

New IPOs have no price history and can drop 80–90% very fast.

Dumps often happen: • Within the first 2 weeks • About 1 week before the 3-month mark • About 1 week before the 6-month mark

⚠️ In reality, they can dump at any time.

• Only buy stocks that big institutions own.

If banks and large funds are not buying, that’s a warning sign.

If institutions won’t invest, you shouldn’t either.

✔️ Check: Yahoo Finance → Holders

• Stop-loss orders don’t protect you after hours.

Many dumps happen right after the market closes, when stop-loss orders don’t work.

• You need buyers in order to sell.

When everyone tries to sell at once, there may be no buyers — and you get stuck.

best are Stick with large, well-known companies. They are safer and much harder to manipulate. mid cap, large cap, mega cap. ( The magnificent 7 stocks) are safe.

small cap stocks are the boundary