Telegram groups pump up ASX gold miner by 84pc

TomRichardsonMarkets reporter andcommentator

Sep 9, 2021 – 12.01pm

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Penny stock gold miner Australasian Gold Limited bolted highershortly after the market opened on Thursday after members of two organised ASXpump and dump groups using the encrypted messaging app Telegram named it as atarget.

The sharesopened up 9.8 per cent at 28¢, before rallying to about 30¢ before beingmentioned on the Telegram groups at 10.15am AEST. The pump signal created asurge to as high as 47¢ minutes after. The stock’s peak equalled an 84 per centgain.

Accordingto market data, a total of 356 trades for 2.32 million shares worth almost $1million were placed before the ASX intervened and put the shares into a tradinghalt at 10.20am.

TheTelegram groups named ASX Pump and Dump Channel and ASX Pump and Dump Groupboast about 1600 members and regularly post messages referencing other pennystocks or sharemarket chat forums.

Messagesto the group chats in the days before the pump signal signalled the morning ofSeptember 9 as the target date for an organised pump of a penny stock, whichpreferably had a price-sensitive announcement to evade a quick trading haltfrom suspicious regulators.

The samemessages also advised that a company with a low number of shares on issue andrelatively large amount held by top-20 shareholders was likely to be targeted.

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The messages encouraged potential pump group members to alwaysuse a market, rather than limit order, to allow the price to rise. Targetingless liquid stocks and encouraging the use of market price orders allows moreroom for artificial buying pressure to increase the price.

Organised manipulators of stockor cryptocurrency prices will generally accumulate shares inthe pump target in the days before the pump itself, with the aim of sellinginto a pre-planned dump known by its “rugging” slang term.