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[P402]Pink Sheets Stock Quotes

by Nir Dotan, Nir

Companies that are listed on the Pink Sheets are relatively new companies who are just starting up and have not yet developed to meet the requirements needed to be publicly listed. Back then, the companies listed in Pink Sheets offer no information about their company, nor do they disclose their financial condition because they are not required to do so.

To help investors make sound investment decisions, Pink Sheets introduced a classification system that helps them sort the companies by the amount of information they are offering. This will leave the investors a pool of companies who are giving out important and credible information. This move is to give advantage to the investors so that they will minimize the possibility of being victim to a scam and can also lead them to make good decisions.

The classification system categorizes companies into three groups: PremierOX, PrimeOX and International OTCQX. PremierOX is the first classification, companies included in this group offer shares for at least $1 per share, and have at least 100 shareholders with a minimum of 100 shares each. The companies under this group also meet the important requirements needed to participate in the major stock exchange companies.

The second classification is PrimeOX; this level is quite the same as PremierOX. The only main difference is there is no minimum price for the stocks offered and only 50 shareholders with a minimum of 100 shares each will be given entry.

The last level is the International OTCQX, which is a classification for international companies. Under this category, there are two sub-categories which are International Premier OTCQX and International Prime OTCQX. The basic requirement for an international company to be included in this category is for them to meet the requirements needed to be listed in their home country's stock exchange. As an additional requirement, their filings must also be available in English.

People are investing in Pink Sheets and Penny Stocks because it is very cheap, investors can get in very easily in these markets. Because of the easy access, a lot of scammers are taking advantage of this. The first thing that you need to do to avoid falling prey to scams is to research about the company and get to know its background. If a company wants to be listed in Pink Sheets, all it needs to do is to enlist the services of a market maker or broker to get their shares quoted.

No financial report submission is required, so it is a haven for fake and phony companies. Since Pink Sheets would not be able to offer you vital information, take it upon yourself to get to know more about the company before you invest.

Before entering into any investment deals, due diligence is important. You have to be very vigilant and always be on the lookout for companies who are looking for their next victim. If you are well-informed, you will have an easier time in finding good companies which you can invest in and can possibly make you financially wealthy.

Pink sheet stocks are considered by most to be extremely risky stocks. These are companies with very little public information and financial disclosure. Many times they are shell companies with paper stocks and without any product or service that has an acceptable market. Due to its lax nature of public disclosure, it is hard to attract new capital either from new shareholders or from bond issuers. However, a move from pink sheets to a listed security can do wonders in a company's ability to raise capital in the market place.

What does it take to make this move and how does one go about it? After all, pink sheet stocks that are worth pennies could become worth tens of dollars, if not more, should they go on to be listed on the major exchanges. Who would not want to buy a stock for a few pennies and sell it for tens of dollars? After all, this is the very essence of capitalism.

The move from pink sheets to being listed on the major exchange requires overcoming many hurdles and meeting many requirements. One of the most common ways to make the move is to do it step-by-step. The first step would be to make a move from a pink sheet stock to the Over-The-Counter bulletin board. On the OTC bulletin board market, at least a stock is priced by a few market makers for the stock. Market makers or dealers will buy and sell stocks and create a market for those individuals who wish to trade, buy or sell these stocks. The market makers make a spread between their buy price and their sell price. To move to the bulletin board, a stock must generate enough buzz and excitement about its product and potential financial gains for the near future. Besides some savvy marketing, some assistance from some deep pocket players and a reasonable amount of public disclosure, the company must definitely have products that are marketable. Without a visible potential for the company's products, it would be hard to make a move from pink sheets to the bulletin board and to the major exchanges.

There are an estimated 20-25 million small and micro cap investors in the United States. This is fertile ground to find the deep pockets for pink sheets and OTC stocks. The public that can and is willing to take risks in search of outstanding rewards is where a small company that is contemplating a move from pink sheets to the OTC market should concentrate on. Once the investing public can buy into the plan and the company, the move from the OTC to the major exchanges is easier since the company could go back to the same shareholders and ask for more capital. Having already seen a great gain on their initial investment, this group would be a willing shareholder base to build upon.

Obviously, the bigger hurdle is to move from bulletin board to being listed on the major stock exchanges. However, having proven the potential of great rewards, there is a more willing and a bigger pool of investors waiting to pour finances into the company now. At this stage, the company just has to provide complete disclosures and offer a good faith prospectus to move forward on to the major exchanges.

Article Source : Pink Sheets

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Both Nir Dotan & Fr Penn are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Nir Dotan has sinced written about articles on various topics from Argentina Travel, Penny Stocks and Pink Sheets. Nir Dotan is a writer and promoter of services, and Preferre. Nir Dotan's top article generates over 74000 views. to your Favourites.

Fr Penn has sinced written about articles on various topics from Recreation and Sports, Cars and Recreation and Sports. By FR Penn sponsored by http://www.firstamericanstock.com/, registered with the Securities & Exchange Commission as a Registrar and : http://www.fir. Fr Penn's top article generates over 1000000 views. to your Favourites.