What Exactly is a Penny Stock?
Wednesday, May 28th, 2008 There are a ton of definitions out there for what exactly a
penny stock is. The general accepted definition by both the public and the SEC
is a stock priced under $5 a share. Usually a penny stock doesnt have much of a
history behind it and the company as a whole is valued at $4 million dollars or
less.
Many young companies start out as penny stocks and eventually climb out of
penny stock status. Many other companies wait to go public until their stock is
already worth more than the penny stock range. The difference usually lies in
the need for investment capital.