Penny Stock Pump-and-Dump Risks: Reddit Insights vs. 2025 Research on 'Next GME' Candidates

Reddit users in r/pennystocks highlight critical themes around penny stocks promoted as “next GME” candidates:

• Pump-and-dump skepticism
  : Many mock repetitive hype (e.g., “cost to borrow bro, 0 shares to borrow bro”) and note small investors often bag-hold after 400% pumps dump quickly.
• Profit-taking importance
  : A high-score comment emphasizes small investors hoping for 100x returns end up bag-holding, while those taking 2x gains cash out successfully.
• Squeeze hype doubt
  : Users question if recent squeeze attempts are real or just hype, with one noting “we will never get another GME”.
• Mixed outcomes
  : Some users profited (e.g., $300 from SGBX’s 4x surge), but vulnerable investors (e.g., poorer Europeans/Indians) are often left bag-holding.

2025 research confirms pump-and-dump patterns in penny stocks labeled “next GME”:

• GLTO
  : A 350% surge on Oct 7, 2025, followed by a crash back to near-original levels [2].
• SGBX
  : A 49.77% single-day surge on Nov 17, 2025 (from $2.15 to $3.22) with 20.7M shares traded, extreme volatility (52-week range: $1.81-$122.88), and poor fundamentals (negative net income: -$22.41M, EPS: -$121.68) [5,6].
• OPEN
  : Promoted as the “2025 GameStop” but crashed 27.7% in September 2025 [3].
• Manipulation susceptibility
  : Penny stocks’ low volume and weak fundamentals make them easy targets for pumps [4].

Reddit discussions align with research: pump-and-dump schemes are prevalent in “next GME” penny stocks. While some Reddit users profited from short-term pumps (e.g., SGBX), research shows these gains are unsustainable. The gap between hype (Reddit’s “to the moon” claims) and real fundamentals (research’s data on GLTO/SGBX/OPEN) highlights FOMO-driven investing risks.

• Risks
  : Vulnerable investors face bag-holding; fake squeeze hype leads to losses; poor fundamentals increase manipulation risk.
• Opportunities
  : Early profit-taking (e.g., 2x gains) yields returns but requires strict discipline to avoid FOMO.