zombi,
The OTC-BB is like a subsidiary of NASDAQ. While NASDAQ controls the OTC-BB, the two agencies are separate entities.
You don't sell directly to another buyer on the OTC-BB. There is a middleman called a market maker (MM). You sell your shares to one of the MMs who in turn resells those same shares (hopefully, from the MM perspective) to another investor who wants to buy.
Ideally, an MM never ends up stuck with stock at the end of the business day. However, in reality, this ideal goal is routinely not met, and MMs do have to "own" those shares. In the case of thinly traded BB stocks, they may have to own them for a much longer time period than they would sometimes like.
MMs make their money on the bid/ask spread. They sometimes make money on the actual ownership of individual stocks, but they sometimes lose also. Given their druthers, most honest MMs would prefer not to be holding equities at the end of the day. The bid/ask spread is a guaranteed money maker for them. Short term stock ownership is not.
If you should try to sell an OTC-BB stock, and your broker tries to persuade you not to, get your defenses up. If s/he says something like "we can't find a buyer", then RUN FOR THE HILLS MAN! This is almost always an absolute sure sign that something is wrong with the picture, and you don't want to be holding, despite your broker's claims to the contrary. Oh, and get a new broker too. Chances are that this one is crooked.
Hope this answers your question.
KJC |
