Texting and stock investing don't mix

It was just one line, with more information promised on the website vipstockpicks.mobi. Another text came two hours later, saying TRON "is already up 20%+ today. Get in now before the BIG news comes this week!"

With about 20 minutes left in the day's trading, a third message arrived: The stock was up 41%. The text again urged me to get in before big news came this week. About 48 hours later, there was another text, suggesting that it was not too late to act on Toron.


The truth, however, is that anyone buying stock on the basis of a text message from a service about which they know virtually nothing is making a mistake, which is why Toron is the Stupid Investment of the Week.

In fact, Toron's pick is less about the company than about the way investors found out about it; it's hard to believe any stock being pumped via text message would be a good idea for average investors.

The interesting thing, of course, is that somebody would actually trade on advice from an anonymous text, from an anonymous website, where the information amounts to "Buy now!' without any real knowledge of the company.

Michael Whitehead, Toron's president, said the company was unaware it was the subject of the text messages and has no idea who is behind the push. It's not the first time in the company's short history, however, that it was used this way; Whitehead's wife once received a spam email touting the stock.

"We want to attract investors, but not this way," Whitehead said in a telephone interview late last week. "I believe we can attract investors by moving the company forward and having some success, which would attract investors who want to be part of this for the long-term, and not somebody who is going to buy today and sell tomorrow."

Anyone who followed up on the text by going to the VIPStockPicks website didn't exactly get any real information. The reason to invest in Toron was summed up by the site: "We all know it's the big announcements that make these small gems move."

But it would be news to Toron's president if the company had a big announcement to make.

"Whoever is behind (the texts) is making that up," Whitehead said. "There is no big announcement coming right now."

Toron was organized in 2008 and according to its own filings with the Securities and Exchange Commission was "engaged in the marketing, sales and re-sales via the Internet of web domain names."

Last summer, however, the company made the completely logical decision to move from that business into "identifying and pursuing options regarding the acquisition of mineral exploration properties." At that point, it effectively went from a shell company to an operating company, although you can't tell it by the company's revenues because there have never been any, through its latest quarterly report, dated Oct. 31, 2011.

When it made the change, the company acquired "an undivided 100% interest" in 62 mineral claims in Canada. The company then underwent a 32-for-one stock split, increasing its float to 185 million shares.


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