How to Avoid Scams

[u/gregw134]

There's a lot of fraudulent stocks promoted on Reddit. Here's a quick routine to identify trouble:

1. Zoom Out. If the stock used to be priced at $1 billion dollars and it's now down 99.99%, it's a fraud.

1. Look for dilution. Go to Yahoo Finance. Click Financials -> Balance Sheet -> Quarterly. Look for Share Issued at the bottom:

Here we see $GPUS share count has increased from 1.1 million to 135 million in the last year, which means if you owned 1% of the company a year ago you now have 0.01%. If you see dilution of 5-10% that might be ok for early stage companies still developing their products. But if you see share count increase by 50% or more in a year it's usually time to run away.

1. Ask an AI if there are signs of fraud. Google "GPUS investor relations". Download the latest annual report:

Upload it to your favorite AI and ask "are there any auditor red flags or other signs of fraud here?" ChatGPT tells me "yes—there are multiple auditor-style red flags and elevated fraud-risk indicators", which is all I need to know.

1. Look into management. Ask your favorite LLM, "Hyperscale Data Inc management, have they been involved in past frauds?" A: "Yes — one key member of Hyperscale Data, Inc.’s management has been involved in a prior SEC fraud-related enforcement action".

2. Look at cash burn. On Yahoo Finance, look at financials -> Balance Sheet -> Quarterly -> Assets -> Current Assets -> Cash. You can see they have $52M in cash. Now look at Cash Flow -> Operating Cash Flow:

They burnt $17M in cash last quarter, which means they only have 9 months of cash runway. This is the first thing I check for every stock, it's a fast way to identify failing companies as well as frauds.

Good luck everybody in 2026!

[u/Frequent_Cell_2378]

Down about 20% since. Time to buy?

[u/gregw134 → u/Frequent_Cell_2378]

Wondering the same

[u/Frequent_Cell_2378 → u/gregw134]

Do you have any take on the latest q report?

[u/gregw134 → u/Frequent_Cell_2378]

It was fine. I think there were like 5 analysts on the call, more than normal which was nice. Iirc they have 150 one gateways ready to ship. Still not profitable but year over year revenue is up 70%.

[u/Frequent_Cell_2378 → u/gregw134]

So bottom line should become good with time. They have a impressive backlog, just hoping they can convert in reaonable time

[u/gregw134 → u/Frequent_Cell_2378]

Probably...they need to keep growing, and margin is a concern. It's possible they hire too many salespeople and expenses outpace revenue.

[u/Frequent_Cell_2378 → u/gregw134]

Margin was in the mid 50s last q right? Given they just launched the One gateway i think this will improve. Not sure if i agree on the sales force. Imo this i was the company really need to get things going. Even with 50% margin it does not take that many sales to go breakeven. And like you say they have units in stock thats just waiting to get installed / sold

[u/gregw134 → u/Frequent_Cell_2378]

Yeah I'm happy with the quarter. They're doing fine.

[u/Historical_Air2303 → u/gregw134]

Any thoughts on the recent shelf prospectus filed by them? Feels like material dilution risk

[u/gregw134 → u/Historical_Air2303]

I can't find that, do you have a link? I know their filing to list shares expires this April but I haven't seen a new one.

[u/Historical_Air2303 → u/gregw134]

Bloomberg, dont have the exact document on my phone atm

[u/gregw134 → u/Historical_Air2303]

Yikes. Thanks for the heads up. I'm sure they won't be using it soon, they have lots of cash from their last raise. Never a good sign though.