Principle is rather simple. Some "investors" supply themselves with a significant couple of pennystocks over a period of some weeks (carefully, so that stock price increases only mildly). Then they generate such a spam mailing, saying: "hey, look, this stock has started to move significantly - might be the next Apple / IBM / Exxon / whatever."
If enough morons catch the hook and buy the stock, it will go further up. Then the "investor" sells his package, making some good money, and the stock price of the (presumably) junk coorperation will soon be again down in the dumps, meaning the morons lost some money.
The trick is: this may even work for you, if you're early enough. Just like in snowball games. If you're an early buyer, and enough people buy after you, you may win some money. Kind of a self-fulfilling prophecy. But very risky, and with a couple of moral issues attached to it.
Nb: the stock market as a whole does not generate cash. All the money you win, someone else loses, and vice versa. That is why sentences like "a lot of cash was burnt" when a stock comes down are pure bullshit. Nothing was burnt, except some virtual revenue.
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