Sidestep Fraud in Micro Cap Stock Alerts
The smallest, lowest priced, and least known investments today are known as micro cap stocks. They are thus named because they are companies with the smallest capitalization value. This is the total value of all of a company’s assets. Micro cap stock alerts are popular because of their low price; the value of stock can be as little as six dollars per share. This attracts buyers that are looking to make a small profit, though the risk of buying micro cap stocks is very high.
A micro cap stock alert is fashioned to allow investors to view the status of their stock. Since these types of stocks are normally traded on the OTCBB, the companies are substantially smaller than those listed on the NASDAQ. In fact, micro cap stocks are frequently small enough to fall short of the requirements for listing. With pink sheets and the OTCBB, investors may trade these ‘penny stocks’ in small volumes.
Before investing in a risky micro cap stock alert, consider the reputation of the site. A fraudulent site may claim that the OTCBB is connected to the NASDAQ. This is impossible for the NASDAQ is a separate entity from any bulletin board site. A site offering the best returns on micro cap stock is often misleading, either changing information to make stock look more attractive, or not keeping up to date. Trading over pink sheets is not SEC regulated, and therefore is not carefully controlled by government agencies.
As micro cap stocks tend to be low in price, it is important to consider the value of the company as a whole. Some companies may be worth as little as 1.2 million dollars and have very few shareholders. As a result, stock in these companies is traded in small volumes. There is a small amount of stock value to trade to begin with, so rapid shifts in price are common. This is because any amount of bulk stocks traded takes a significant portion of the company with it as the price fluctuates.
Since OTCBB organizations are not well regulated, their information can be misleading. By law, they are required to provide accurate information, but, even under delinquency, some companies still operate providing users with information that may not be to their best interests. However, a reputable OTCBB site may provide invaluable insight into a company’s progress. Even so, consulting with a financial advisor before investing based on information from micro cap stock alerts is the best idea.
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Before investing in micro cap stocks always make sure you are well informed. Take advantage of micro cap stock alerts and sign up for free at Killerpennystocks.com.
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