Tease your following with something distant and abstract yet positive sounding.

If you’ve played your cards right up to this point, due to the sheer force of your social proof (e.g. bubbly market cap, bought Twitter followers, etc.) the masses are already ascribing all kinds of positive character traits onto you, such as saying you are a great showman and salesman, despite the fact that you sound like an incoherent bumbling fool every time you open your mouth. Due to this positive halo effect, everyone will give you the benefit of the doubt for just about anything you say. Now you need to milk this and give your worshippers fodder for even more wild speculation and drive up your stock’s lottery premium. Throw fuel onto the fiery frenzy of speculation.

Drop vague hints about future end markets you can enter that have a large TAM, or promise some future product attributes (that you see all your competition already has), or drop clues about solving some hated world problem (e.g  eliminating traffic with underground transportation...like subway systems). For your supporters, like any totalitarian cult, it is all about the future, never the present. Keep the focus on the future…that is when real life begins…promise merry go-rounds and pomegranate flavored Greek yogurt for your underpaid minions at your factory. What you are trying to do is simultaneously fulfill people’s persistent compulsion to gamble and allow them to fantasize about a better future. 

Take Messiah Musk’s brilliant use of this law when he tweeted that he would reveal his “D”…and something else! A terrific use of sexual innuendo (not even innuendo, just blatant, really) was a cherry on top and it drove the masses wild.




It didn’t even matter that Elon’s D was a let down and nothing to write home about. It was simply another version of Tesla’s dated, failure prone sedan. Delivering or meeting the fantasized expectations of what is hinted at is not necessary, just a vague promise or premonition will do the trick. Like most Laws of Hype this one is more about entertaining your following than it is laying out an actual coherent business opportunity. You don’t have to suck in everyone for these methods to serve their purpose, just the credulous idiots will do.

Need more examples?  When describing the Model 3, Musk stated, “it will be unlike any car you’ve seen before” and “it will be like driving a spaceship.” Ooooo, a spaceship, think of the possibilities! To many industry observers, the Model 3 is indistinguishable from a 2013 Mazda 3 and the interior is on par with Fisher Price's Power Wheels, but people's imaginations have been running wild for months and the hype has reached levels of hysteria not seen since the Tesla Battery Swap demo event. 

There is a genius depiction of this persistent psychological vulnerability that you are trying to take advantage of in a scene from Family Guy. Peter has won a prize and can choose between a boat and a “mystery box.”

“A boats a boat, but the Mystery Box…it could be anything Louis…it could even be a boat!”​

Weave such a simple narrative that every idiot can regurgitate it and force them to unknowingly disregard any empirical evidence; he who tells the simplest story wins the hype.

Unless you live in the upper Amazon you are well aware that Donald Trump is now the GOP Presidential nominee and Jeb Bush and the rest got blindsided and are out. Ask yourself this one question: Who simplified their message more? It is well understood that Donald Trump speaks at a 4th grade level and Jeb Bush speaks at a 10th grade level. In politics and hype (a bit redundant, I know), less is more. Try to cut your investment narrative down to something will fit on a bumper sticker or a hat. Channel Donald Trump. Think Ronald Reagan: "Less Government", "Lower Taxes." Or Bill Clinton: "It's the economy stupid." And even Bush Sr., "No new taxes."

This soundbite narrative will be judged for its simplicity and mass appeal rather than its logical argument being adequate or it being correct. feasible, or relevant to an investment decision. The conventional view is that investors buy and sell on the basis of fundamental information. In the real world this is rarely the case, they mostly buy based on the simplified narrative or theme. 

It is no secret that future Hall of Fame hypester Kevin Conroy has grand political aspirations (politician in this case defined as professional hypester that wastes other people's money with no accountability, Conroy's has perfected this as CEO of Exact Sciences). Why do you think this is? He has mastered the art of Law #11. Repeated hundreds of times and at dozens of investor conferences every year, Conroy has simplified his companies narrative down to a single line: "Exact Sciences' mission to eradicate colon cancer." This from a company that has an inferior and more expensive test that will never be profitable, but they are winning the hype game as the gullible investors eat up the over-simplified narrative. 

“Tell that story until you can’t stand the sound of your own voice anymore." -Kevin Conroy 10/22/14, two years later still not sick of his own voice.

Think about the oversimplified soundbite narrative and mission of Tesla, it has been repeated public hundreds of times: "Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport." This has been repeated incessantly as a sort of chant. Like Trump, Musk speaks at a third grade level, but has a cult following due to a dumbed down chant. Chants/repeated mantras are one of the best known ways of brainwashing someone, thus you want to cut your narrative down to one single over-simplified line and repeat it as a chant to brainwash the sheeple. 

Netflix's Reed Hastings has also taken Law #11 to heart, with an oft repeated: "all TV will move to the internet within 10 to 20 years."

This simple narrative has been repeated word for word in hundreds and hundreds of articles (if you don't believe me, Google it). There is no thought that goes beyond that quote--that is all a potential investor needs to know. Even if true, the narrative does not prove if NFLX will be the long term winner or ever be able to turn a profit, but the Hype has been set in motion and the rest of the details are noise beyond that one line. 

Dumb it down. Simplify and clarify your narrative down to one short line. Then repeat that line every time you speak in public and the sheep and journalist will go forth and endlessly echo the message word-for-word. 
​

If people start to snap out of their hypnotic trance and your power to control the stock begins to fade you must go Nuclear.

For example, you just had an analyst day at a fancy hotel and the effects are waning, you must act more boldly so as to not get lost in the competition for attention. It is best if you do this through a surrogate, such as an investment bank. If you dangle the carrot of being the lead book-runner for a large equity offerings in front of a new bank that is not currently covering your stock, you can enact a quid pro quo situation. Your goal is to have someone else toot your horn with an absurdly bullish initiation report. In bull markets sell side reports will have an asymmetrically positive effect on stocks, as the negative ones are usually summarily dismissed.
           
Authority: TherapeuticsMD. As TXMD’s stock price slipped from $9 to $5, they had an analysts day consisting of a panel of “key opinion leaders” with conflicting interest pumping their end market and potential product pipe dreams. As the effects of this waned and the stock slipped even further from $5+ to $3.80 in short order, FBR Capital Markets came out with an incomprehensible sell initiation report that contained zero new information or insights, or near term catalyst cited, with a headline grabbing $34 price target. That price target is full 9x higher than the previous trading day’s low. This caused a 30% pop in the stock the next day, which was good for almost $200 million manifested market capitalization. Insiders were steadily cashing out and getting desperate to maintain the façade, so they had to resort to bolder and bolder moves. Take a page from their playbook and when your hype is fading, you must go nuclear and pull out all the stops. 

Make a small token purchase of your company's shares as a psychological gesture that gives the lemmings fodder for more blind purchases. 

A small token purchase of your shares can serve as a strong, false psychological signal of confidence. Your buy can have rippling and lasting effects as a gesture that the lemmings can cling to as fodder for more blind purchases of your overvalued equity. One often hears the individual investor say things like "an insider only buys for one reason: they think the stock is cheap." Money talks so a small token purchase, however much of a rounding error it is compared to your ill-gotten net worth from a generous options package, will make the masses believe that you know something they don't. Your purchase can insinuate so many different things to so many different people--perhaps a positive new development is on the horizon, or maybe you are about to unleash a new "secret weapon." Your false signals can have the power to keep the fairy-tale going for a few more chapters. 

An even better false signal methodology to maximize the duration of your cult-like retail investor following is to make a series of small purchases. If you can spread your purchases out over time you can keep your stock showing up on insider buying screens time and time again. This will also keep your ticker in the headlines and the subject of dozens of Tweets for weeks on end every time a small insider purchase is made. Your false signals of a small token buy can also offer a plausible cover for any future lawsuits if your company collapses. 

Observance of the Law

If your business and hopes for substantial long term cash flow generation are floundering and you need to be extra bold in your hype, you should issue a press release hyping your share purchase. This is another tactic to increase the attention your false signal receives and maintain a facade for the blind capital to admire. The lemmings with blind capital should react positively to the press release hyping your false signal, but given that it is a bizarre move and may reek of desperation, it may potentially backfire by drawing attention from seasoned short sellers. Use sparingly and preferably in raging bull markets when your hype is waning. Here is a good example from TrueCar (TRUE):

"Scott Painter, TrueCar Founder and CEO, Buys 70,000 Shares of Common Stock 
Thursday, February 26, 2015 02:00:00 PM (GMT)

SANTA MONICA, Calif., Feb. 26, 2015 (GLOBE NEWSWIRE) -- Scott Painter, chief executive officer and founder of TrueCar, Inc. (Nasdaq:TRUE), purchased a total of 70,000 shares in two open market transactions this week as disclosed in a Form 4 filed by Mr. Painter with the Securities and Exchange Commission.

"We're pleased that Scott is making this statement of support for TrueCar," says Steven Dietz, TrueCar's Lead Independent Director and a Partner at Upfront Ventures. "Upfront is excited about TrueCar's long-term trajectory, and we expect to hold our 10 million share position for quite some time."

Painter continues to rank among the company's top shareholders. Following the purchase he controls approximately 10.8 million shares of TrueCar common stock, including exercisable stock options, which represent more than 12 percent of the company's outstanding shares.

"I believe strongly in the long-term prospects for this company and want to participate financially in its success alongside our other stockholders," Painter said."

There are other ways and times you will be able to cash out. Depending on the cash compensation package you negotiated, your token purchase should be small relative to the size of your annual salary. If the masses swallow your false signals, you can buy yourself years worth of additional exorbitant salary and perks. Another potential way to cash out is the Elon Musk method with margin leverage--send a false signal by purchasing shares in your company's equity-offerings, but take out a loan so large from the investment bank handling the offering that you actually are putting tens of millions of cash into your pocket. This method should be reserved only for the most brazen and delusional Hypesters. 

Law #24 Authority: Philip Frost, CEO of Opko Health

OPK is the quintessential example of sending false signals. Despite blowing more hot air and missing more milestones than even Elon Musk, OPK has garnered a militantly bullish cult lemming following. OPK will be featured in many more Laws of Hype and thus should be studied and scrutinized by enterprising Hypesters in how to conduct a Hype Campaign built upon no fundamental foundation. OPK is run by an individual so hyper-focused and obsessed at defending the illusion of progress, they will go so far as issue press releases to clarify why insiders sell stock. Even as a $6 billion company, OPK's CEO Philip Frost often conducts interviews on retail day trader oriented pump-and-dump websites, to spread the Hype to all corners of internet chat rooms.
One can quickly and easily search Twitter for $OPK to see the pervasiveness of cult shareholders due to Frost's frequent insider purchases. 
Additionally, here is just a small sampling of headlines on various investment websites that could be generated by your false signals: 
 Opko Health's Insider Buying A Rx for Profits?
Opko Health: Frost Resumes His Insider Purchases
Meet Dr. Phillip Frost, The Hypertrade of Opko Health
Opko CEO Adds to Buying
CEO Phillip Frost Increases Stake in Opko
Opko Health Inc: Frost's Binge Keeps Moving
Opko's Frost: The CEO Who Keeps Buying His Company's Stock

With enough false signals generating a higher stock price, ultimately you may be able to buy a real business with your inflated equity currency before your Potemkin Village is discovered as a pure facade of business durability. 

Transgression of the Law:


Kevin Conroy, architect of EXAS' epic hype campaign recently sold shares after his stock had sold off aggressively when the company had to report lack of sales execution for their only diagnostic product. Unless the wheels are imminently about to fall off and you are desperate to cash out, selling directly after a massive decline and showing zero price sensitivity to cashing in your options is the opposite of what you should do to lengthen the duration of your hype's effect--it will portray weakness and can be taken as a sign of panic. Only resort to this when there is little hope of your Hype Campaign resulting in your stock reattaining its previous highs. 

Historical Case Study: It is imperative to not make the amount of capital for your false signal too large for you to handle. You have to understand your false signal is a potentially equivalent to a sacrificial lamb...it is meant to buy you time and infuse a false sense of confidence into the marketplace. If at all possible, you should have a surrogate act on your behalf--encourage the company's executives and board members to send the false signals for you. On October 24th, 1929 (what is known as Black Thursday), Richard Whitney was used precisely as such a surrogate. Whitney was Vice President of the NYSE at the time and one of the most well known and well liked financiers of the era. The leaders of Morgan Bank, Chase National Bank, and National City Bank of New York tried to send a false signal to stem the panic in the market. With much hullabaloo and the resources of the banking cabal, Whitney marched on the floor of the NYSE and bought 10,000 shares of US Steel at $205, an above market price. This was quite a substantial sum at the time. This false signal did help to quell the chaos temporarily...for about one day, but ultimately proved as fruitless as trying to put out a blazing forest fire with a spray bottle. When possible, use a surrogate's capital and refrain from putting your own money in harm's way as your house of cards could come falling down at any moment. The timing of your false signal is everything. Don't step in front of a freight train, or if you must, use someone else's money. 

In the early stages of your hype campaign, increase the frequency of your press releases.

In these times of incessant sensationalist media bombardment, people have attention spans shorter than...oh look a squirrel! What was I saying? Oh, yes, people have attention spans shorter than two Tweets plus a cute cat Vine video. This has caused media news cycles to become compressed. You may put out a press release that you think will give you days or even weeks of positive coverage and attention, but you're in for a rude awakening when it gets swamped by an avalanche of new Kardashian selfies.  Media outlets have to come up with content to fill 24-hours of coverage and because of this they try to make things appear to change more than they actually do to try in order to hold people's attention. In an effort to combat the slow intellectual erosion of potential investors, you must increase the frequency of your press releases and pseudo-events (events you create to make look like news) dramatically in the early going. Blitzkrieg can be translated into "Lightning War" and a method of warfare characterized by a series of fast and powerful attacks in short succession in a concentrated manner. Like the Germans invading Poland in 1939, you want to adopt a Blitzkrieg PR campaign in the early going. It hardly matters what you have press releases about--it matters more just that you are in the news. When this happens people will generally be seeing your company in the headlines and checking the stock and tweeting about your stocks, this rush of attention in a raging bull market will generally lead to dumb money flooding in and running your stock up--this is the perfect way to kick off your hype campaign. It is important to use creativity in order to come up with enough things to create press releases for in a short period of time (~1 week to ~3 months)--ideally you have news of new partnerships (do not disclose any terms or related financials) and can get positive association with bigger, more well known companies, such as when Elon Musk alluded to Tesla working in partnership with BMW: "We are talking about whether we can collaborate in battery technology or charging stations," Musk was quoted. (Nevermind that a BMW representative responded with this: ""Elon Musk is using us for PR purposes". "BMW can currently not recognize how the company would profit from Tesla because the young EV manufacturer does not have a technological advantage in any single area.")

"The electric car company Tesla gained about $2 billion in market capitalization after Elon Musk's October 1 tweet that it "was time to unveil the D and something else." - Be sure to work in cryptic language and vague references as much as possible, to let the mass' imagination run wild. 

Your Blitzkrieg Hype PR Campaign would be even better if you can also work in some press releases that highlight meaningless metrics, such as Tesla's in regards to opening their 50th Super-charging station in Europe, or Zillow's fluff PR from just one week ago: "More Than 1 Million Real Estate Professional Reviews Now on Zillow."  

Studying Elon Musk's Twitter history can also serve as a good guide. When there is bad news or operating results at your company, you should re-initiate another Blitzkrieg Hype-Cycle to shift investor attention away from your ongoing cash burn and instead dangle something shiny in their faces (just make sure the actual deliverables are years down the road).  In the early going any news is good news--once the gullible sheep believe your story hook, line and sinker and are acting as your Hype surrogates at cocktail parties and on message boards all over the internet, then you will want to slow the news flow to a dead stop. At that point, only positives will be projected upon you. This is akin to the wise saying that it is better to keep your mouth shut and let people think you are a fool than open it and remove all doubts.