Is this how penny stock works?
solidice27 asked:
If I buy a penny stock for ex. RSMI.OB (250,000 shares for $130) which currently stands at 0.0005 – Now if it goes bankrupt or goes down to 0.00 . Does that mean I only lose about $135?
If I buy a penny stock for ex. RSMI.OB (250,000 shares for $130) which currently stands at 0.0005 – Now if it goes bankrupt or goes down to 0.00 . Does that mean I only lose about $135?
Also, can I immediately sell this stock at any time, or do I have to wait for someone else to buy it from me?
RSMI – http://finance.yahoo.com/q?s=RSMI.OB
I used this stock calculator: http://calcs.cu-secure.com/calcs/stockcalc.html
penny stocks work like this:
1) company goes public too early
2) company fails miserably, and is booted from exchange
3) spammers tell you to buy the stock
4) you buy the stock FROM the spammers
5) spammer gets rich
6) you lose every penny you put in
7) you end up living in your parents’ basement until you die of a heart attack at age 35 from eating nothing but Doritos, while the only exercise you get is lifting the remote to tune in to the next Buffy the Vampire Slayer re-run.
Yes you can loose everything it cost you.
You could try to sell the stock, but with penny stocks, especially in a down markets, there may not be many buyers. or any at all.
In the OTC market, market makers do not have to step up and buy.
this is the price you pay for trying to trade pennys stocks
Rim currently owes $5.3 million to various lenders who have given the company cash in exchange for shares and warrants. It also has $1.6 million worth of accounts payable and accrued expenses, and owes its chairman, Ray Willenberg Jr., $49,000 that Willenberg recently lent the company.
Rim has about $1,600 cash on hand. I have more cash than Rim, and I don’t owe anyone $5M!
Penny stocks are that cheap for a reason; they are generally worthless.
Penny stocks are the last place for new investors to be. Take 5 years learning Large & mid cap stock investing. Take another few years to learn small cap investing. Then… maybe… try penny stocks.
If you are going to sell something, you have to sell it TO someone, so yes, you need someone else to buy it from you.