Penny stocks sometimes go by different names such as micro stock, nano stock, micro cap stock, small cap stocks, etc... Don't worry or confuse about these names because they all lead to the same meaning of penny stocks which is the stock is low-priced issues, often highly speculative, selling the share under one or five dollars and is traded either on pink sheets (over the counter) or on the NASDAQ.
This makes me ask myself "Why all investors come back to penny stocks?" or "Why we love penny stocks?"
Penny stock is a device allows investors to make quick gains. In addition, it is a cheap stock that keeps investors coming back so it's useful for a new investor to pick penny stocks.
That was about investors; what about companies?
It's important when you learn to trade penny stocks that you remember to make this difference. The company that trades with penny stocks will have a low value compare with the other company which trade with the stock market regularly. These companies should have a net worth of four million dollars or less in net tangible assets. In other words, if the company has heavy assets, it will have a good amount of inventory.
So penny stocks come from the company that has less salary, fewer inventories, unknown company, and don't carry a large amount of business.
Ask yourself, "Can I deal with new companies?" if your answer is yes, then do your best to learn how to invest wisely in penny stocks. But if your answer is no, try to invest your money in another stock.
