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BizReport : Email Marketing : October 02, 2006

Stock Spam Makes Up 15% of All Spam

The spam wars are hardly over. Testimony to this is a new version of junk mail that seems to bypass many otherwise efficient spam blockers. It’s called stock spam, emails sent out recommending penny stocks from energy and mining companies.

by Angelique van Engelen

Research has shown that stocks touted on mass mailed out emails experience noticeable activity on the stock market, making stock spam highly successful. According to Sophos.com, an internet security company, 15 percent of all junk mail is stock spam. This compares to just 1 percent some 18 months ago.

The trouble with spam’s latest ‘mutant’ is that it simply is too nifty a device because it simply fits all the requirements of a classic stock market money making scheme. Researchers at Harvard Law School, Oxford University and Purdue University found that stock spamming is popular simply because it happens to work. In a recent study they reviewed some 75,000 stock tips. "Among its millions of recipients are not only those who read it, but who also act upon it."

They add that only a few dozen people need to buy a stock and the resulting increased trading volume will drive up the price considerably. The spammer, who will typically hold a large volume of shares, will cash out his shares at the higher price and make a killing by self activating the share. The spammer will then cease his spamming campaign and the price will soon fall to its original level again. The few people that bought the shares lose out, if they hold on to the shares too long. The researchers said that the average price increase in a spammed stock's price is around 5 percent.

That’s not all. The spammers are also using the latest tricks in the book to get past spam filters by incorporating their messages inside digital images, making it impossible for filters that only scan email text to catch them out. Software using image filters are bypassed, because the spam senders simply make a small change to the pixels in a digital image. Image based spam is highly on the rise in all forms of junk email, Sophos reports. The company says that since June, more than 35 percent of all spam is image based, a doubling compared to six months hence.

Tags: stock market, stock spam

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