What Is a Pump and Dump (P&D) Scheme?
A pump and dump (P&D) scheme is a fraudulent investment strategy that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. This type of market manipulation is illegal in most countries, including the United States.
The perpetrators of this scam typically purchase large amounts of shares from unsuspecting investors or use their own money to buy up stocks before they start promoting them as good investments on social media platforms such as Twitter or Reddit. They then spread rumors about how great these stocks are doing and encourage others to invest in them too. Once enough people have bought into it, they will quickly sell off their holdings for huge profits while leaving everyone else with worthless paper assets.