One might think that “Penny stocks” are stocks that cost around a penny 🪙

This is very reasonable, but oddly, penny stocks are a little more tricky 🤔

Penny stocks are stocks from small companies that trade at a low price, usually under $5 per share 💸

Penny stock was just catchier than a “less than $5 stock” 🤷

They often have a small market capitalization (under $300 million) and are relatively unknown to most investors 🤔

Penny stocks can be from newer companies, but more often, are companies that aren’t doing well 😥

They can fall to this low price for various reasons, such as poor financial performance, weak management, or high debt levels 📉

Investing in penny stocks can be very risky because of their volatility & because they are prone to price manipulation

That is: they can be easily manipulated by fraudsters, leading to significant losses for investors 🔍

It's important to conduct thorough research and analysis before investing in penny stocks, and to be aware of the risks involved. 🔎

So, while penny stocks may seem like a tempting investment due to their low price, investors should approach them with caution and be prepared to potentially lose their entire investment 💭