Traders on Twitter tend to be a riotous bunch, often trolling each other, hiding behind pseudonyms, and both attracting and dishing out accusations of shady practices. Nowhere are these dynamics more vivid than in the cluster of FinTwit devoted to the OTC market.
OTC, or over-the-counter stocks, are particularly risky by nature. Not listed on major exchanges, they are often thinly traded, highly volatile, and usually worth just fractions of a penny per share. Getting into penny stocks is relatively easy as long as you have a brokerage account that supports OTC trading, and it can sometimes be highly lucrative. But it’s not for novices or the faint of heart.
Jordan Belfort, made famous in the movie The Wolf of Wall Street, pleaded guilty to securities fraud and money laundering charges in 1999 for pumping and dumping penny stocks through his Long Island-based brokerage Stratton Oakmont. Today, social media is the new haven for penny stocks, and there is no shortage of claims about it being used by bad actors for similar schemes.
Less than two weeks ago, a 50-year-old Maumee, Ohio resident named Steven Gallagher was arrested and charged by federal prosecutors in Manhattan with using a Twitter account named after A Clockwork Orange character Alex DeLarge to pump and dump stocks. According to a companion civil complaint filed by the U.S. Securities and Exchange Commission, he pushed at least 60 stocks, reaping ill-gotten profits of as much as $3.4 million. He was released pending trial on a $1 million bond.
Gallagher’s arrest prompted a flurry of finger-pointing on Twitter and questions about what other popular anonymous accounts might be “next.” However, one of those users, ClairvoyantAlphaTrader, vigorously asserted that he was in no way associated with unsavory schemes. Although he declined to reveal his identity, the trader graciously answered our questions via Twitter DM explaining more about himself, why he tweets about stocks and his approach to investing.
(We were unable to verify some of his claims, such as that he is a “billionaire,” but he has tweeted about more than a dozen OTC stocks whose prices rose around the time he mentioned them.)
This interview has been edited for length and clarity.
The Business of Business: So how long have you been doing this, tweeting about stocks on the internet?
ClairvoyantAlphaTrader: I started trading stocks senior year of high school on and off, met my mentor Street Trader on iHub in 2012, then started using Twitter to log my progress as he was [trading].
Why do you do it?
I’m a world traveler and investor, so I invest in equities, cryptos, startups and soon real estate.
Why do you prefer to remain anonymous?
Powerful people don’t want to be seen, the richest people in the world do not want to be seen. We like to fly under the radar. Money attracts attention and I would rather live in peace.
Can you tell us some demographics about yourself — whatever you’re comfortable with — so we can get some idea of the person behind the avatar?
I’m from Brooklyn, New York, born and raised. I’m between the ages of 28 and 32. I’m unfortunately a human (because humans are a very punitive species). I don’t categorize race because there is no such thing.I’m a male, never married. So ladies, I’m single and [have] no children [to the best of my knowledge].
I’m not employed. My highest level of education is a bachelor’s degree in business and economics. I love to travel. I LOVE LATINAS. I love my red wine but not dry. It has to be sweet or slightly sweet. I love mojitos. My favorite fish is red snapper. I love the beach, it calms me. I love to watch the sunset. I love seeing people happy. That’s what life is all about. As Bob Marley said, “my richness is life, forever.” I just try to live to the fullest. Also might be time to settle down. Going to look for a wife starting next year so we can build a future together.
You call yourself a “billionaire investor” in your bio. Is that accurate? If so, how did you make most of that money?
Yes, that is correct. I am a billionaire, or “crypto billionaire” would be the correct term. I got lucky to tell you the truth. Back in college, my roommate was a nerd and kinda weird. He was always on his computer for hours and hours. He recommended me to buy bitcoin instead of buying Four Lokos (before they changed the formula) and beers (Bud Light Lime). At that time, bitcoin was trading around $2-$3 I believe. When he told me it ran to $10, I was like, WTF. I started digging into it and got cold feet because of Ecash [an early, unsuccessful internet-based money startup].
“My goal is to have my own space ship one day. Call me crazy, but I will.”
After a while, he keeps bugging me about it and I started doing my [due diligence] on it and I was like, “fuck it.” I threw $15K from my refund checks I had saved up from my student loans and an extra $10K from savings totaling $25K. My first buy was around $7, sold at $50. It dropped to $20, and I rebought it. In 2014, when it hit $900, I was up $63 million. Then I started to diversify into other coins. Fast forward to 2021, and I’m worth purely in my crypto holdings over $1.7 billion, all in cold storage. I know, I still can’t believe it myself, how I turned $25K into $1.7 billion. I know some people don’t believe me but I don’t give a fuck.
What kinds of startups do you invest in?
I invest in early-stage startups, either seed round or between Series A to C max. I like robotics startups. Some I told my followers to get into are Miso Robotics Series C, which was at $17.16. Another robotics I like is Blendid. I also invested in space startups. I have my hands on so many propulsion system startups, internet in space, spaceship startups. My goal is to have my own spaceship one day. Call me crazy, but I will. And I have many crypto startups I have invested in. So overall I invested in about 50 or so startups.
What investors do you admire most and why?
Well, my No. 1 investors [that I admire] are Benjamin Graham and Warren Buffett. They made me who I am today as a pure fundamentalist investor. No. 2, I have to say Bill Ackman because he takes a stand and gets actively involved in the companies and he doesn’t fuck around. Now for trading OTC, besides my mentor Street Trader, I have to give it to Zalmy @greatstockpicks.
[Those are] by far the top two investors in the OTC in my opinion.
You mentioned making other people millionaires. Why do you want to help other people make millions?
Well, I came from nothing, literally nothing. There have been days I didn’t know where my meals were coming from. And that’s in the U.S.A. I am now a world traveler and have been to many poor countries and one thing I can say is they’re all happy. A family with either too little or no food will share whatever they have with you. I have seen people happy with a smile on their faces, just living life, but they don’t know where their next meal will come from. Because of this point of view in life, I feel happy seeing a smile on people’s faces. And what brings smiles to people’s faces in the States? Money. Millions will also make people happy.
You fiercely dispute any suggestion that you “pump” or “dump.” Why is that? How would you describe your approach?
In a pump and dump scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock and then “dump” shares of the stock by selling their own shares at the inflated price. Once the fraudsters dump their shares and stop hyping the stock, the stock price typically falls and investors lose money. This is a legal definition of an investor who pumps and dumps. I NEVER SPREAD FALSE OR MISLEADING INFORMATION. I HOLD STOCKS LONG TERM. I DON’T HAVE A GROUP THAT PUMPS STOCKS.
“I never did nobody wrong. I made a lot of people rich and those that are not rich are hating on me.”
I think some are calling me a “pumper” because I had a 2021 Millionaire Challenge [chat room] which I created in January based on investment ideas only. I was betrayed by Judas [Another OTC trader on Twitter] and he kicked me out of the room and he turned it into a pump and dump group. Because I started the room...people think I’m still involved in the group, which I’m not because I got kicked out months ago.
You mentioned that you have a lot of enemies on the internet who trash talk you. Why do you think that is?
It’s human nature to hate. It’s encoded in human DNA. No matter how well your social interactions go, how much you accomplish, or how much good you put into the world, you will always have haters. Humans don’t like seeing other humans succeed while they’re still at the bottom. That’s all. I never did nobody wrong. I made a lot of people rich and those that are not rich are hating on me.
We have a list of your best trades. Are there any that you would point to and want to talk about as being particularly successful?
Wow so TSNP [ building and renovation retailer Tesoro Enterprises] aka HMBL and [biotech Enzolytics] ENZC these two, I was speechless. I actually started buying both TSNP and ENZC from .0004-0007 and told others on Twitter these two will be life-changing. I didn’t and I couldn’t imagine TSNP would hit $1.93 from .0004 starter positions. Like, this OMG never happened in the OTC. Also ENZC hit .95 almost $1. These two plays were life-changing, unimaginable, this is why I’m very so high on both TGGI [holding company that has been associated with cannabis Trans Global Group] and VPER [LED lighting company Viper Networks]. These next two plays I really really think will pull a TSNP and ENZC move.
Why do you prefer trading in the OTC market?
Well, to tell you the truth, because I’m bored and the OTC is exciting and fun. I have a good amount in long-term investments which I just keep. In the meantime, I like to trade and make some money and the OTC is that market because it’s easy and exciting.