If you want to make real money in Market, you don't want to follow Pump & Dump (P&D) crowd's approach to OTCBB. Promoting your Smoke & Mirrors (S&M) stock and selling your shares into Market isn't very profitable.

Let's assume that you spent a million dollars to take public a Smoke & Mirrors company on OTCBB. You have four million insider shares. You raised $500,000 by doing an IPO at $0.50/share. Thus, S&M company has 5 million shares issued. This is about limit of shares workable for any OTCBB company.

You wait one year, spending your IPO money on your salary etc. Your 4 million shares are now free-trading. Because SEC rarely enforces Insider Trading Rules, you intend to ignore them. You're ready to do your first small P&D. Your target share price is $3.00/share. You expect to sell your insider shares on average at $1.50/share.

It'll cost money and stock to do stock promotion. We'll assume that you'll have to trade your S&M float (create 5 million shares of buying) to generate a $3/share price for your S&M company. If we apply Florida formula to creating 5 million shares of stock at an average price of $1.50, dollar cost to you will be about $750,000. The Florida formula assumes that your P&D group knows what its doing. You'll have to give away some of your stock to stock brokers, investor relations firms, and others. If you know what you are doing, you'll give away less than 1 million shares. Whatever stock you give away will be sold into your P&D. Let's assume that for this small P&D, it's 500,000 shares.

Public investors on OTCBB are speculators. It's only way they can make money. You must assume that your one million-share float will be sold into your stock promotion. This means that 1.5 million shares (remember 500,000 shares you paid to create buying?) of S&M selling won't benefit you.

Your next problem is that there are an array of Market Professionals that include Market Makers and stock professionals such as myself that will easily spot your P&D in it's formation stage. We'll buy your stock cheap and sell it high. We'll be at least two million shares of your selling. The Rule of Thumb is that small P&D sellers dump about 25% of volume. (In a major P&Ds insiders can do up to 40% of dumping. and they get money from Private Placements they arranged during their P&D.) In our example, you'll have sold 1,250,000 S&M shares at an average price of $1.50. You will have grossed $1,875,000. Deduct your $750,000 cost and you appear to net $1,100,000. Keep in mind that many P&Ds lose money for promoters. However, in our example you are a winner.

The SEC may not rigorously enforce Insider Trading Rules. They only respond to public complaints in about 10% of P&D cases. However, they respond to nearly 100% of P&D's whose share price collapses. Thus, you must support your P&D share price as it slowly collapses below one dollar.

If you're spending money to raise money for a private business, you're betting on a long shot. The odds are against you. There are two reasons that investors prefer public company speculation. 1. If they see your business plan in trouble, they can sell their stock and recover their risk capital. 2. The odds that your share price will outperform your balance sheet are overwhelming. Consider Amazon.com share price against its audit. As a public company, Amazon.com has been a winner for many investors. As a private business, would you have invested in it?

When you are serious about raising risk capital, you are talking about taking your company public. It's cost of going public that financial professionals consider as Cost of Money.

In April 1999, it cost about $1.23 million to do an IPO (Initial Public Offering). I did a cost and alternatives study for "American Venture" Magazine. I sent you a copy of my Report, last year.

In April 1999, you had two lower cost alternatives to going public, without doing an IPO. You could buy a trading shell or you could arrange to do a spinoff. The costs ranged between $125,000 and $200,000 for shells or spinoffs.