Following an article by Moneycontrol on the use of social media to pump-and-dump stocks, a person who identifies as a whistleblower has written to the market regulator alerting the regulator to a similar campaign.
According to the person's plaint, the stock of BLS International Services was being promoted through various platforms and the modus operandi was very similar to what had been described in the article.
After independent checks, Moneycontrol found that there was indeed a rise in the number of posts on the stock across social-media platforms such as Twitter and Telegram, and in the number of bulk SMS-es being sent out on it. Other social-media users were also noticing the rise in the number of these messages and were warning each other against falling for the positive narrative that was being built.
Moneycontrol also checked with a leading finfluencer who alleged that a person claiming to be from the company has been reaching out off-and-on to finfluencers, asking for the stock to be promoted. Such campaigns can be run with a budget of a little over Rs 50 lakh and finfluencers have said that the campaign managers can even come up with a budget of Rs 1 crore.
Also read: MC Investigates: Companies hire finfluencers for IPO promotions that violate regulations
The posts started increasing in frequency from May 21 and the stock went up by nearly 4 percent in three days. It closed at Rs 317 on May 20 and at Rs 329 on May 23.
In response to Moneycontrol's email, the company said that they were not aware of such developments happening on social media and Telegram channels.
They said, "We would like to assure that BLS is fully aware about the SEBI (LODR) regulations & compliances and BLS will not indulge into such acts which will impact the credibility of BLS and its management."
A full-fledged campaign
That said, the social-media posts and messages show various indications of being a campaign.
One is that there are similarities in the texts and images being used.
For example, this image is being used again...
... and again...
... and again, across Twitter and Telegram channels.
The text of the posts are also similar, predicting that the stock can cross Rs 600 level in three months, about it being the next Multibagger 2024 and how it can help an investor's portfolio "skyrocket".
On checking the social-media handles posting about the stock, one can also see that they don't usually post about investing and stock ideas but about other media campaigns that are running at the time and across subjects—such as politics, cinema or cricket.
This isn’t the first attempt at running a campaign to promote this stock. In October 2023, there was a similar attempt with the use of a hashtag—MonopolyStockstoInvest—to promote the same stock. Back then too, the company had told Moneycontrol that it was not aware of any such trend or of any suspicious third-parties trying to manipulate its price and volumes.
The whistleblower has also made other allegations against the company and copied the market regulator on the letter.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
