Thursday, December 04, 2014

Connor Bruggemann

It was just a few weeks into the new school year when Connor Bruggemann decided to play sick. He holed up in his bedroom, shut the door, and opened his laptop. Over the summer his father had opened an Etrade account for him, using around $10,000 Bruggemann had saved up over two years working as a busboy and waiter at a local BBQ joint.

At first Bruggemann had used that cash to buy some big, well-known stocks: Apple, Verizon, and a few others. But today was different. One by one he liquidated those positions and put almost everything he had into American Community Development Group Inc, ticker sign ACYD, a penny stock selling for $.003 a share.

Over the next year Bruggemann would turn that $10,000 into more than $300,000, principally trading penny stocks, a practice rife with risk, fraud, and wild swings of fortune. He took off school that day, but for most of the time when Bruggemann was trading, he was also a 16-year-old high school junior in Wyckoff, New Jersey. With his iPhone in hand, Bruggemann would buy and sell six figures of stock from his lunch table, the bathroom, and, occasionally, on the sly while sitting at his desk.

ACYD was Bruggemann’s first big trade. It’s a manufacturer of industrial grade wireless equipment for municipal Wi-Fi systems. He had listened to a conference call where the CEO announced it would buy back shares of the company to try and spur the price towards 1 cent a share. Four days later, Bruggemann accumulated a position of several million shares at the price of roughly one-third of a penny each. Four days after that, the company officially announced its share buyback program, and the price began to climb.

By the end of September those shares had reached a price of a little over a penny each, and Bruggemann’s portfolio was worth more than $50,000. By October, the price of ACYD shares had risen to around 6 cents, 20 times what Bruggemann paid for them. His portfolio was suddenly worth just under $200,000. He sold off most of that position by the end of the December, by which time the stock was down to 4 cents.

By March, ACYD was down to a penny, and today it sits at $.0036 a share, almost exactly where it was when Bruggemann got started. It’s a reminder to him that trading such volatile stocks is a dangerous game.

"I guess the rule of thumb is, when you invest in a penny stock, expect to lose every dollar you put in. So there is always that risk," he told me. "There have been several times where I put every dollar I’ve had on the line, and fortunately it's worked out almost every time." He stops, then corrects himself. "Every time! Or else I’d have nothing."

[via facebook]

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