Anonymous-0
Well-known Member
My theory of why most penny stocks will not make you money ...IMO...The reason is that most of the shares have to be held by company insiders or the market makers before the stock price would be allowed to rise. There is no reason for the market makers to move the price up if 90% of the shares are held by individual investors. If most of the shares are held by individuals and the market makers want to move the stock price up, they have the company implement a reverse stock split. If the R/S does not get enough people to sell, then the company dilutes the the remaining shares by selling new shares after the split to drive the price down to the pre-split level ,this is done to get more of the individual shareholders to sell their remaining shares.After the company and market-makers control most of the shares, the price will rise .Wish I knew this 20 years ago.
