The Wonderful Old Parsonage
I was having dinner at the lovely Old Parsonage with my dear friend Jonathan Zittrain while in Oxford. JZ is a brilliant professor in the area of Internet Governance and Internet Law and the founder of Harvard’s Berkman Center for Internet and Society. Over a great bottle of single malt, we were celebrating the success of his recent paper being featured in the New York Times . JZ’s paper brilliantly discussed the rationale behind Stock Spam.

In addition to the spam asking for our help from Nigerians with princely sums locked in Bank Accounts, our collective inboxes have been overflowing with ‘hot stock tips’. I just figured most everyone deleted these messages, not giving them a second thought. JZ’s paper painted quite a different story, in fact, one that highlights why spam continues, because people respond to it.

JZ and his team did exhaustive research into the timing of these stock tips and the price of those stocks. These stocks were thinly traded ‘pink sheet’ stocks that fly below the radar of Wall Street. These spammers would take a position in one of these stocks and then unleash 100 million emails reporting it as a hot stock to unsuspecting recipients.

As crazy as it may sound, enough people call their brokers or hop on e-trade to buy the stock. Being a low volume stock, this surge in volume drives the price up, giving the spammer a nice return when he or she unloads the stock.

While there is some debate regarding who actually said ‘There’s a sucker born every minute’, I would like to add ‘and they all have an email address’ ☺.