Chuckle. Even now, there are naive and unsophisticated individuals who believe OTC stocks are traded on an actual exchange like the Stock Exchange in lower Manhattan. They mistakenly believe the order they placed with a discount brokerage over the internet is actually negotiated on the floor of the Exchange by floor traders acting as agents for the brokerages.
Although there are numerous companies that list their stocks on OTC Markets most are regional banks and foreign companies. The foreign companies can be quite large. The stocks that trade on overseas markets are actually listed on regulated exchanges.
The OTC issues usually referred to as penny stocks are priced that way for a reason -- double zeroes and triple zeroes. They don't generate significant revenues, have no employees other than the officers, are often one man operations with the lone individual holding the titles of President, Secretary, Treasurer. They aren't registered with the Securities and Exchange Commission.
The corporate charters allow these individuals to authorize and issue as many shares the laws of the states where they are domiciled allow them to authorize and issue.
The goal of the people who operate these public stock companies is a simple one: self enrichment.
The sophisticated penny stock speculators understand this strategy and attempt to profit from what are known as pump and dump operations. The sooner they take positions at the the lowest price available the better their chances of making anywhere from 1 to several thousand times their original trading capital.
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