Stan The Trading Man – Can He Be Trusted?

Stanley Barsch aka Stan The Trading Man is a penny stock investor with a net worth of $1 million. Stan’s profile really took off during the pandemic. Thousands of bored, jobless Americans are now chase stock market riches by gambling on penny stocks. Stan has benefitted from the rise in investor mania, some of them discovering his “high quality” DD.

Stan has been referred to as a “pumper” on Reddit – someone who accumulates a position in a company and heavily promotes that stock to others. Typically the companies promoted are more hype than substance but are tied to a catalyst.

Genius Brands (GNUS) is a prime example. They are a children’s media company that creates and licenses entertainment content. Despite the catalyst for short-term growth, management has consistently failed to turn hype into tangible value for shareholders. Genius Brands are facing declining revenues, spiralling expenses and will do well to avoid bankruptcy in the future.

The Washington based trader gained a reputation for finding big movers early – other examples include IDEX & XSPA. The whole thing has become a self-fulfilling prophecy. Traders buying alerts because the previous picks were big runners. Those who took the risk and invested early most likely made lucrative profits. The poor souls who bought late or held shares for the long-term ended up as bag holders.

Stanley’s fame on Twitter hasn’t gone unnoticed by financial media outlets, appearing in various news articles and on Fox Business alongside Sharmila Viswasam. The pair were interviewed by Charles Payne on their journeys to become successful day traders. Funnily enough, Charles Payne has history touting penny stocks on Fox, somehow he didn’t get fired.

Controversy

Poor Stan got himself into trouble in August 2020 due to inappropriate messages with a female trader. The tweets were leaked across social media and instantly went viral. The whole penny stock community came after him, labelling him a “creep” for his actions. Ms Viswasam seemed to be one of the few people sticking up for him during the tough times.

Stan later apologized and took a break from Twitter. Loyal followers were left in the lurch, who would they now follow for new penny stock picks? Luckily, the likes of Stock Lizard King, Buy Sell Short, Yates Investing and Huge Henne filled the gap left while he was away.

Return from Hiatus

In November 2020 Stan returned to Twitter and was back in full flow, sending out 10+ tweets per day. It appeared Stanley was focusing more attention on lower priced stocks, under 10 cents in some cases.

HQ Global Education Inc (OTCMKTS: HQGE), a recent pick was trading for less than a cent at the beginning of February 2021 and reached 3 cents per share before it crashed. These triple zero penny stocks are insanely risky and are not long-term investments. I wouldn’t hold any shares overnight.

Labor Smart Lawsuit

Trading under the ticker LTNC, Labor Smart was Stan’s latest hot pick, a company that started out in the recruitment business is now selling hydrogen water products. Stan was a big believer in the business and predicted it would reach $1 per share.

LTNC peaked at $0.08 at the end of March but since then has crashed over 80%, leaving disgruntled shareholders sitting on huge losses. On June 22nd, Stan deleted his Twitter account and LTNC’s parent company Takeover Industries is suing Mr Barsch for stock manipulation. Will be interesting to see how the lawsuit plays out!

Conclusion

If I was Stanley I’d be more careful around how he promotes companies. I believe it’s a matter of time before the SEC gets involved and starts prosecuting traders for pumping OTCs. The Financial Times is taking notice of the OTC market, picking out two traders – Alexander Delarge & Canadian Jennifer for their role in pumping SpectraScience, a company that hasn’t filed financial results since 2017!

Although Stan does have a lot of haters (among them Tim Sykes) I don’t have anything against the guy. He’s attracted a lot of new attention to the OTC markets, most of which shouldn’t be anywhere near the financial markets. While it’s possible to make money with Stan’s plays, I advise you to thread carefully. Don’t get caught holding the bag.