Has Any Penny Stock Become a Large Successful Company?
If you go around to any penny stock message board, blog,or social media group you will indefinitely find countless posts and messages reading something along the lines of; “This isn’t your typical penny stock company,real legitimate business here” or “This company has real revenues, incredibly undervalued” and I could go on and on. These posts usually gain the attention of the masses, which then pour in, pushing the stock price up dramatically. This in turn is usually followed by a sharp decline, where the price plummets back down to levels much lower than where most initially bought the stock, causing many to suffer substantial losses. The previously described scenario is fairly commonplace in the small and micro cap markets. Most anyone that successfully trades penny stocks on a consistent basis will tell you, the first rule of pennies: “Don’t marry a stock”. Yet still,a majority of the investment community trade on emotion rather than logic. They passionately flock to companies, buying as much stock as they can; deep in their hearts truly believing that they have found the needle in the haystack. They convince themselves the company is going to be an overwhelming success no matter what and come to the conclusion that they are going to stick with it for the long haul, for better or worse. A feeling of loyalty then begins to develop causing the investor to over look and begin ignoring warning signs and red flags. We’ve all seen this situation many times over, heck;most of us have been through it ourselves. But how many have ended up on the other end of the table? How many have made that commitment, gone long in a company, and the company actually did become a huge success? Challenge: Name a company that went public as a penny stock company, grew out of the penny market, and became a successful important company? It has to be a U.S. company and must have had a stock price below $1.00 when it went public. Here are two example companies, one which is commonly thought to have started as a penny stock and expand out but actually did not. And the other is one of the only companies that I am aware of to have actually expanded out of the penny market and become a common household brand. Contrary to popular belief Intel was not a penny stock. Intel went public in 1971 at$23.50 per share. Far from being a penny stock at offer. Most people when looking at Intel’s chart over its history get the impression that the stock price dropped into the pennies because of all of the splits done over the years, but this is not the case. On Sept 17th,1974 there was a split adjust price of 16.1 cents, however the lowest price that someone paid for a share that day was $15.50. Cisco, who’s offering was priced at .08, is one of the best known companies to date that was able to break out of the penny market. On Feb 16, 1990 was Cisco’s IPO, by 1991their price had over doubled to .20, less than a year later it almost tripled to.59, and by 1993 Cisco pulled away from the penny stock market and crossed over a dollar. Cisco’s stock price as of today is $19.83. So if you purchased 100,000Cisco shares on offering day at.08 for a total of $8,000. Those 100,000 shares would now be worth a whopping $1,983,000, now that’s quite a return. http://www.thestocksignal.com