by Wayne Ramsey

Created on: October 27, 2010   Last Updated: October 28, 2010

Investing in the stock market can be an incredible feeling similar to gambling.  The risk may not be quite as high, but the feeling during a major win is very similar.  In fact, many of the same people that find thrills in gambling are the same people that invest in the riskier stocks in the stock market in hopes of hitting it big. The problem is that many investors don't realize that most stocks, especially those in the micro caps are controlled by groups. Hitting it big isn't as much about finding a stock with potential as much as it is about finding a stock that a group is likely to promote. These groups are typically referred to as awareness groups or stock promotion groups. 

What is a stock promoter or stock awareness group?

A stock promoter is simply someone that promotes a stock in one form or another. Often times stock promoters are referred to as awareness groups as they are responsible for making investors aware of the current developments in a stock. The idea is that these promoters will bring volume to a stock for a number of reasons. The reasons are different depending upon the type of promotion that is being done by the promoter. 

There are basically a few different types of promoters. Each type of promoter is similar in many regards but they have a different function in the promotion of the stock itself. The first type of promoter is one that goes out and finds new business and then hires awareness groups to do the promoting for them.  This type of promoter is often times paid in cash or stock from the company.  There may also be a large block holder that could front the transaction to keep the company out of it. These promoters are normally brought in so that a company can get volume coming in so that they can sell shares onto the market to raise funds. This type of promoter will also buy shares at a considerable discount from the company in what is called a private placement or debt conversion. By doing this the promoter is able to sell their shares faster without getting in trouble for scalping although the profit margin is lower as a result of buying directly. 

The other type of promoter is the type of promoter that is going to do the work.  This group could be hired directly by the company or by a third party to push the stock.  This could be done in a variety of different ways and often times depends upon the budget. Normally a stock newsletter is sent out informing subscribers of the benefits

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