Goff Corp (OTCBB:GOFF), a social recruiting-company-turned-Colombian-gold miner, did not exist as an incorporated business before the summer of 2010 and did not trade as a public company until March 2013. Yet since its debut on the over-the-counter market, on average it has traded more shares each day than Apple Inc. (NASDAQ:AAPL) or Exxon Mobile Corporation (NYSE:XOM).
Goff Corp (OTCBB:GOFF)’s rise and fall — and massive trading volume — reads like a playbook for how penny stock promoters hype a stock. Goff Corp (OTCBB:GOFF) is not a viable company but a blank canvas, void of everything but press releases and false hope. Thus far in 2013, it has had wholesale changes in both strategy and ownership. It has not recorded a single dollar of revenue, ever — which isn’t abnormal for a shell company .
Investors, undeterred, uninformed, and trying to turn a quick buck, nonetheless lined up to buy the stock, to the delight of the penny stock promoters who had been pumping Goff Corp (OTCBB:GOFF) several times a day across multiple sites.
With Goff Corp (OTCBB:GOFF) shares now at $0.02 a share — down from an all-time intraday high of $0.65 — let’s look at how the scammers run their scam.
Blogs and bribes
On April 2, just as the hype game was getting going, a Motley Fool blogger was asked privately about writing a blog post on Goff Corp (OTCBB:GOFF).
A person calling himself “John O’Connell,” purportedly representing “Investor Associates, LLC,” contacted the blogger via LinkedIn Corp (NYSE:LNKD). O’Connell offered “four-figure” compensation to write a positive article about the company — and when our blogger declined the offer, O’Connell even offered to write it for him, if the blogger would simply post under his own byline.
The blogger still declined, and immediately thereafter brought it to our attention. When I spoke with O’Connell by phone, he told me he had only reached out to two people, neither one taking him up on the offer. He ceased such blogger outreach once realizing it was against Fool rules, he said.
And yet, in a stroke of incredible good fortune and unbelievable coincidence for the stock promoters, somehow blogs got written — glowing blogs, each writing optimistically about a company that, to recap, (1) has never made a single cent and (2) went through a wholesale management and business-model change less than 90 days prior.
Several blogs were submitted through our own open Blog Network platform; anyone who signs up can post an article before it is reviewed for syndication. Since early April, my colleague Roger Friedman, Blog Network president, has banned four bloggers because they submitted suspiciously glowing posts on Goff.
Each post was flagged by a Blog Network reviewer and deleted right away, and Roger then severed the relationship then and there. (Aside from being obviously wrong, accepting third-party payments to write about a stock is against The Motley Fool’s rules. We also have strict rules against publishing stories on micro-cap companies with limited liquidity and/or low share prices to avoid manipulation of stock price, intentional or not.)
Only one of the disqualified bloggers even replied to the notice of termination; he appealed for a second chance, claiming it was a misunderstanding. When we questioned the nature of his Goff post, he said it wasn’t a big deal: “I am on a regular basis offered compensation to write about multiple firms.”
I am on a regular basis offered compensation to write about multiple firms.
It’s impossible to know just how widespread is the quid pro quo between bloggers and stock hypesters. But it is possible to know that John O’Connell is a phony — the LinkedIn Corp (NYSE:LNKD) profile he used for his outreach has as its headshot an actual photo from an insurance salesman in Milwaukee (who denied any involvement with John O’Connell and confirmed that his LinkedIn Corp (NYSE:LNKD) profile photo had been copied without permission).