|
There are reasons companies want to be listed on the Pink Sheets. The main reasons why companies want to be listed on the Pink Sheets is because, although their stock will not increase in price because there are no sales occurring, their company gains more credibility and more substance. Anytime a company says to the public that they are a publicly traded company, they can expect the eyebrows to rise. Telling the public that they are publicly traded makes the consumer think, “Wow, they are traded on the stock exchange, so that makes them so fantastic.” The consumer doesn’t have to know they are traded on the Pink Sheets unless they look it up, but some consumers probably doesn’t care or know the difference. These companies most likely do this so they can attract more capital, execute contracts, and obtain more financing. It also helps them obtain agreements by being a publicly traded company even if the exchange it is traded on is the Pink Sheets.
However, once a company is listed on the Pink Sheets, it is easier for them to move to one of the larger exchanges later on. The reason why this is easier is because it is a simpler process to transfer to the larger exchange from the Pink Sheets than it is to be a private company trying to make a place on the larger exchanges such as NYSE or NASDAQ right off the bat.
As far as the actual penny stocks trading aspect, the amazing thing is that companies that are listed on the Pink Sheets can trade for as low as $.00001 per share, which isn’t going to make much of an impact on a penny stock investor’s pocket either way, but they sometimes do trade all the way up to $500 per share and even higher. Foreign companies are amongst those who like to list themselves on the Pink Sheets to be listed as a traded company within the United States.
So the companies that like to list on the Pink Sheets may not move up too much as far as stock price, but it is always said that everything is possible and it certainly is not impossible for a company to develop a new idea and soar from nothing to one of the largest selling stocks on the market.
We strongly recommend that you consult with a registered investment adviser before investing in any stocks. |
