Boxes and Lines The Penny Stock Problem – Boxes and Lines Lite
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Sep 24, 2024 This week, JR, a former SEC insider, joins Ronan to dissect the world of penny stocks. They delve into why these low-priced stocks are notorious for being both risky and misleading. JR shares his insider perspective on the recent surge of penny stocks and the regulatory challenges that have arisen. The discussion highlights Virtu's recommendations for stricter regulations, focusing on insider dilution and market manipulation. Tune in for an engaging chat that uncovers the complexities of these tiny tickers!
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Penny Stocks Defined
- Penny stocks, or sub-dollar trading, are low-priced, speculative, and risky investments.
- They are often issued by companies with lower governance standards, sometimes based offshore.
Exchange-Traded Penny Stocks
- Many penny stocks trade on exchanges despite having low prices.
- This increased volume is partly due to a mini IPO boom and SPACs declining in value.
Bit Brothers Example
- Bit Brothers Limited (Bets) illustrates the high trading volume of some penny stocks.
- In late December 2023, Bets accounted for nearly 20% of all listed market volume.