Investing in Pink Sheets Can be Dangerous to Your Portfolio!
Investing in pink sheets should only be done with extreme caution and with throw away money.
Seriously!
The Pink Sheets does not require companies whose securities are quoted upon its systems to meet any listing requirements. The government and many others warn you that companies quoted in the Pink Sheets can be among the most risky investments you have.
They don't have to follow the guidelines of the SEC. For crying out loud - that is why you need to thoroughly do your homework on any of these companies before you toss money their way. People invest in these companies with illusions of quick riches and soon find they have tossed their money out the door.
I have invested in some pink sheet companies and can assure you, it is dangerous. Yes, some people have gotten rich this way but they are among the few and the lucky. I can show you some of what happens using a couple pink sheet companies I invested in.
The first was eWorld Companies under EWDI, their first symbol I invested under. I had 500,000 shares total. Yep - cheap. I might have had $150 in their. Not a lot but enough.
What I am about to tell you took place in a 7 month period. I started out with 50,000 shares and increased it as the company was making a lot of news and saying they were on the move. In the 2nd half of 2007, they changed their symbol to EWRL and did a reverse split. I had never heard of that but basically they give you 1 share for a lot of shares as they determine. Yes, you get a price per share that keeps your portfolio at the same price, but you obviously lose shares.
The reverse split was huge and get this . . . . . My 500,000 shares became 42 shares. I kid you not.
They continue with the big news releases as their stock price tumbles. Now, in March of 2008 they decide to do the same thing. They now change their symbol to EWRC and do another reverse split! Amount of stocks I now have with them? 0 - None - Nada.
Do you believe that? I mean I was on some forums and people were extremely upset with this company and yet, here they were, getting ready to toss a huge party and ask for new investors while basically throwing overboard many previous investors.
OGOH - Annother story I can tell you. OGOH, On The Go Healthcare - completely changed their company, new symbol is now MODI, did a reverse split, then another, again in a short period of time, did a 2nd reverse split. This time my initial stock purchase of 30,000+ has now become 2.
I have another that has done similiar but I'm feeling depressed telling you about these. I just want to fully help you understand the need for extreme caution when investing in pink sheets. Do your research and never use money you are going to miss if you lose it.
These kind of stories are by no means limited to myself. I have emails from people telling me of situation like this and you can read up on pink sheet investing on the web and discover just how volatile this type of investment can be.
I am not saying avoiad them at all costs. If I see one I feel is stable, I might even consider diving in again. But it won't be with any money I will need for my retirement.
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