If a company is listed on the Pink Sheets they are not regulated by the Securities and Exchange Commission (SEC). There is a growing amount of technology companies in the Pink Sheet listings. Some of the companies may have at one time traded on Wall Street but for one reason or another have gotten themselves delisted, however, they can still trade on the Pink Sheets which is considered a high risk venture, so only the strong need apply.
Not all the companies listed on the Pink Sheets are companies no one has heard of. Etoys has had its run on both Nasdaq and the Pink Sheets as well as Iridium, and NorthPoint Communications. Experts in the industry state that a lot has changed since 1999, which is when the Pink Sheets became digital. However, what hasn’t changed is that trading on Nasdaq then landing on the Pink Sheets has and will always remain an unpleasant experience.
There is somewhat of an appeal to Pink Sheet listings. Those wanting to invest hope that a stock that at one time traded high will do so again and by buying it at one sixteenth of a penny they will make their fortune when and if it rises. Even though some consider this an investment, some consider it gambling. With people winning millions gambling, there are just as many if not more people that are still willing to spend their money and take that big risk, hoping that the next big windfall will land right in their lap.
Before you start browsing through the Pink Sheet listing, it’s important to find yourself a penny stock expert. There are many available online who will email you regularly with what they consider their hot stock picks. They will tell you at what price to buy and what price to sell. And with the experts help, your gamble may just be the next big thing.
John Triggerman writes on Penny Stock Trading. He also has a blog about Kenneth Cole Accessories.
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