I'm getting depressed. I took a look at UPDV Board - they're suffering the same fate as us. They seem to be convinced that management wants to drive the price down far enough to force the stock into the pinks and do a revesrse split (I think that's what they said). I also found this list of penny stock tips - and if I had included this in my own DD, I wouldn't be here today. (I did not author these tips - presumably someone smarter than me did)
Penny stock tips 1
These are some brief tips which I will add more information on in later posts.
The most important rule if you invest in penny stocks is READ. Message boards, books, tips from people. Gather as much info as you can on the stock you are interested in.
1) .0001 is the lowest penny stocks can go, unless of course the company goes out of business. Many of them do. I have seen more pink sheet stocks near .0001 than the OTC ones.
2) Try finding a company with a product or service that would sell big. Something that is not on the market yet is even better.
3) Too much competition if it already exist will make it hard for the penny stock company to make it. The fewer competitors they have the better. It's important to do research in this area before investing in it.
4) Keep an eye on the O/S count of the stock. The higher the O/S is, the less the stock is worth. Stocks with less than 1 billion shares O/S is best. Less than 500 million shares is even better. Avoid the stocks with billions and billions of shares. The company isn't worth anything and will most likely do a reverse split in the future.
5) A/S is authorized shares. Once the company maxes out the A/S, they usually do a reverse split or increase the A/S even higher. Be careful if the outstanding shares are getting close to the A/S.
6) Raising the A/S dilutes the stock even more because they will usually issue more shares and max it out,then the reverse split follows. This happens a lot with the pink sheet stocks.
7) Reverse splits are usually never a good sign. If you have 100,000 shares and they do a 1-100 reverse stock split, you only have 1,000 shares left. I have seen 1-5,000 reverse stock splits on the cheap stocks. Most of those are just scams. If you ever find out that they did a huge split in the past, DO NOT BUY THE STOCK. They usually just keep doing the reverse splits over and over. I AVOID THEM.
8) Reverse splits usually only work if the company is getting off the pink sheets or the OTC and moving on to a bigger exchange. They are OK if the company is already making a lot of money. Reverse splits with no revenue is usually because of bad management. Those stocks usually keep doing reverse splits over and over again because management can't run the company well.
9) The same revenue each quarter with no increase is usually a sign management is incompetent. These type of stocks need a miracle if they ever will go up big. Look for increasing revenues each quarter.
10) It is a good sign if the CEO has good communication with shareholders. I found that CEO's who never update investors on anything usually have nothing good going for them. A lot of those company's may be fake also if they never issue press releases. The stocks that are dead silent with press releases usually are fake. Be careful of too many press releases though. Stocks that issue press releases all the time are usually fake. Also if the press releases sound weird or phony, avoid them.
11) If penny stocks go up big with no news, it usually means someone is pumping the stock. DON'T BUY THEM. They will usually fall right back down the next day or so. Wait and get them cheaper. There is an outside chance that good information has leaked out, but that is usually not the case unless the company is well managed.
12) Penny stocks are the cheapest at the end of the year when people sell them for a tax loss. Most people have a loss on all of them. If you like the company, wait until than before buying a big block of shares. The last few months of the year are the best time for buying them.
13) If you look on message boards, use several of them online. I get the opinions from all over the Internet instead of just one forum or message board. Type the stock or symbol in search engines and then go on message boards and read about them. Never judge a stock by some tip you get or from just one person.
14) I usually buy several penny stocks with under a few hundred dollars in each. Never put all money in one penny stock since most of them don't ever make it. If news looks good each quarter I may add more shares.
15) Do not invest more money than you can afford to lose in any of these stocks. They are high risk investments.
16) Penny stocks may take years before they go up big. Hold on to them if you think they may have a shot, because just one big deal can make the stock go up huge. People sometimes sell them too fast. If you really believe in the company HOLD THE STOCK.
17) Overall I think that penny stocks are worth some money invested in them. I have seen many go up huge but I didn't own them yet. They are also fun to invest in since it is like a lottery ticket. It's a wild card.
AI
