Sub-Penny Issues In Favor?
Houston, TX -- (OTCBB NEWSWIRE) -- August 29, 2001, Four of the top five volume leaders are sub-penny issues. The most active issue, the only stock above a penny on the list, is also the only one down for the day. As a matter of fact, eight of the twenty most active are sub-penny and only one of those is in negative territory.
It is often peculiar how trends develop and end. But apparently sub-penny issues are gaining favor with OTCBB traders. There has not been a concise sector leading the OTCBB since May, when any and every thing related to oil and gas achieved star status.
Unlike the broader exchanges where sectors move in tandem with each other, the sector fragmented OTCBB develops more "hot topic" trends. Over the past year we have seen several hot topics gain momentum, from reverse mergers to the newly coined "judgment awards".
This sub-penny attention is curious in its self, since it is not related to any specific hot topic. Most often what happens is, a company issues a press release and investors pounce, driving up share price and recording fabulous gains. Consequently, when more companies issue similar press releases the bandwagon mentality occurs, investors don't want to be left behind. All this combined creates a new hot topic. Until the enthusiasm dries up and investors move on.
It is anyone's guess what the next hot topic will be or when this fashion will end. The OTCBB is similar to the wild wild west, shoot first and ask questions later.
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