Article by David Moore
In the first newsletter about penny stocks I started by telling you a little history about me and the birth place of penny stocks in Denver, Colorado. We touched on the topic of new issues. Then I pointed out some of the reasons why this once thriving niche within the United States Stock Market does not exist like it once did.
In this newsletter I want to go more in depth about new issues. Penny stock brokerage firms, in general, brought new businesses public. They made a market and maintained a price on these stocks based upon the performance of that company.
Officers of the brokerage firm communicated and negotiated with the management of the potential company and discussed, how much money would be raised, and at what price the stock would be sold at. These negotiations often became very spirited because companies often felt that they were worth more than the brokerage firm did.
The goal of the brokerage firm was to raise enough money so the company could accomplish their objectives and meet their projections. If too much money was raised the company may not be as prudent as they could be. If the stock was priced too high, and the company did not perform as projected, the price of the stock would decline costing shareholder value.
The brokerage firms held all of the chips in these negotiations. They had access to the money that the new companies needed. Without the money necessary to launch these new businesses some of today’s very well known companies would not exist.Small cap stocks (new name for penny stocks) are making a big comeback. New industries are developing all the time and some very talented people are following their entrepreneurial spirit by starting companies with new products.
You can probably come up with a pretty good list of new items, technologies and medical breakthroughs that you have witnessed firsthand in the last ten years. There are some tremendous opportunities out there. Do you really believe all of the good ideas are taken?
How are you going to locate these small cap companies? How are you going to track the price of these companies? When do you invest into these companies? Is today’s price a good time to buy?
You could invest in one of the many penny stock newsletters out there. Or, you could go to my website and look at the company with the “Stock Trading Robot”. These guys, formerly with Goldman Sachs, have developed an excellent software program that locates, analyzes and charts penny stocks.
Also, sign up for free downloads, and other money making opportunities, on my website.
If you enjoyed this article, in the next newsletter I will go more into the pricing of new issues and current stock prices.
I sincerely hope all of your dreams come true.
About the Author
The author spent 25 years as a former stockbroker. Besides portfolio management, the job of a stockbroker is locating and analyzing investment opportunities for his clients. Because of his background, he continues to research and endorse money making opportunities. Please visit his website to see his highest rated home based business opportunities at http://www.a2zwebbiz.com
