Citigroup Inc (C)

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Something that may apply to your question

Perceived Risk - There are almost no companies that have gone public at a price below 5-dollar level. Thus, for a company that trades under $5 there is a big chance that some serious operational or financial problems have accrued in the past or recently, and there is plenty of statistics suggesting that $5 stocks frequently go to zero.

Read more: http://wiki.answers.com/Q/Why_is_5-dollar_level_so_important_in_stock_investing#ixzz1876uNz9m

Institutional Investors - Many mutual funds' charters directly prohibit their managers from investing or holding penny stocks (those traded on the OTCBB and pink sheets) and generally stocks under $5 dollars. However, mutual funds are not obligated by any regulations to have such clauses and there are mutual funds that specialize in penny stocks.

Read more: http://wiki.answers.com/Q/Why_is_5-dollar_level_so_important_in_stock_investing#ixzz1876HvOLd

http://wiki.answers.com/Q/Why_is_5-dollar_level_so_important_in_stock_investing

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