Dollars and Jens
Wednesday, January 12, 2011
Market Inefficiency
Even proponents of the efficient market hypothesis don't generally claim that all prices are perfectly right; they usually limit themselves to the assertion that wrong prices are expensive to predict. This story would seem to violate the stronger theory:
Who says you can't make money on Twitter? Rapper 50 Cent just raked in millions.Not the usual way of extracting money from one's fans.
The rapper had plenty to say over the weekend about a penny stock named H&H Imports (HNHI), a tiny operation out of Florida. Why? Because 50 Cent invested $750,000 in shares and warrants in the company last fall. Some of those shares can be cashed in only as the stock rises to 15 cents, 25 cents and, yes, 50 cents.
What better way to pump up the stock than to promote it to your 3.8 million Twitter followers? That's what the rapper did -- and the stock rose 240% to close at 39 cents Monday.
