| | I have traded most financial instruments at one time or another, but never got into penny stocks. For most people penny stocks are securities of small mining operations, which are short on cash and long on dreams, and usually trade on Vancouver exchange or OTC Bulletin Boards. What I didn't realize is just how simple it is to have an IPO and company listed there.
Apparently there is a law firm in Seattle (as reported by Seattle Times), which specializes in the most extreme of these type of deals. They float "companies" from Russia or Ukraine. For example, they registered Green Bikes Rental Corp, based in Ternopil, Ukraine. This Company raised about $50,000 in its initial stock offering. Very soon after that company had to fold, because "marketing research showed that in Kiev, roads are not designed to have bicycle traffic". Joke, right?
That law firm had a string of these type registrations. They float companies which don't have a product, probably no employees or a physical place of business, other than somebody's house. Common denominator seems to be the rush to have an IPO and listing on OTC Bulletin Board. While probably nobody makes a lot of money on any one deal, but do a filing a month and pretty soon we are talking serious money. While seemingly legal, it sounds like a scam. Question is, who buys this crap?
I had couple of orders pending from last week. In both instances price moved in opposite direction, so they are cancelled. Yen has been getting weaker, so I decided to see if it keeps moving that way.
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Penny stocks. |
| | Posted 6/29/2009 1:33 PM - 74 Views - 2 eProps - 2 comments
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