Lack of Information About The Investment
Unlike most large, well established companies, many companies that issue penny stock do not make quarterly and annual reports available to the public. This lack of information about the company's operating history and financial health increases the risk to the investor. The market price of such stock can be based more on the aggressive marketing of the selling broker than on the real value of the company.
Penny-Stock Broker: "What did I tell you! Your stock is up 100% . . . SELL? Are you kidding ? This is no time to sell!"
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