1. Management tries to raise too much money from the pink market. Attempts to raise from 750,000 to one million dollars in a year in any pink will almost always destroy pink investors. An honest finance guy would explain this to management. Unfortunately, not too many maagement guys want to hear the truth so the greedy finance people tell them they can do it even though they know the stock will be doomed as a result.
2. Promoters dumping their stock aggressively into the promotions. The problem is that too many promoters are hired who are too interested in taking their money and running. The vast majority of them do not have any real ability to find a retail audience and the pressure of them selling into the promotion overwhelms the little buying they do find.
It has little to do with any other reason and anyone who tells you it does is either ignorant about the situation or is trying to cover up the truth
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