"Pump and dump" schemes have two parts. In the first, promoters try to boost the price of a stock with false or misleading statements about the company. Once the stock price has been pumped up, fraudsters move on to the second part, where they seek to profit by selling their own holdings of the stock, dumping shares into the market. It is a term passed around a lot when it comes to penny stocks or any type of OTC stocks. People refer to pump and dumps as a stock that goes up very high very quickly and then comes back down fast and rapid as well. It is no secret that market awareness and promotions seem to have a huge impact on stocks that are penny stocks. "Pump and dump" (P&D) is a form of securities fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" (sell) their overvalued shares, the price falls and investors lose their money.