"The requirements for being an OTC-BB are soo minimal, and all they ask is for a little honest, open, reporting to shareholders. "
That indeed used to be the case, but as of Jan 4, 1999 it is no longer the case. Being a fully reporting company, which is the new requirement for being on the BB, is not "minimal." It is expensive and time consuming.
The SEC and NASD wanted to increase reporting requirements, which is a very good thing. But they took the easy way out, IMHO, and simply required all stocks on the BB to become fully reporting. That means that some small public companies which are not scams will drop off the BB and onto the Pinks, for no reason other than they are not rich enough and do not have the extra staff necessary to produce the volumes of paperwork necessary to submit the quarterly and yearly reports.
So, the NQB, seeing an opportunity, steps into the breach and announces the launch date of the Electronic Pink Sheets. Net result: a new level of OTC is created -- Reporting OTC on the BB and non-reporting on the Pinks.
"Please tell us what advantage to Investors there is for a company NOT to report."
There is only one I can think of: The company gets the chance to start from nothing and become something. If you think that is some kind of crime, fine. Please tell me how companies are supposed to start if they are not allowed to start because the cost of starting is prohibative -- both in terms of cash outlay and man-hours required to prepare paperwork in a certain way.
Please keep this in mind: I am not against reporting!!!!!
I just happen to know what is involved in meeting the SEC's requirements as currently written and currently enforced. They are very restrictive, very expensive, do not guarantee anything regarding the legitimacy of the company, or the validity of its business plan, the viability of its products in the market. It just makes one kind of gamble into another kind of gamble.
"Q: would you advise any relative of yours to invest in a Pink Sheet company? I wouldn't. "
There is one right now that I and some of my relatives and many of my friends do own. A couple of weeks ago the bid was $.50 next week I expect it to reach $2.00. The company has major industry "celebrities" associated with it, has acquired 100% of a couple of profitable functioning businesses, has licensed its logo and name internationally, and has secured some major international contracts for its products. For them being on the Pinks was a strategy that was forced on them (due to timing beyond their control and the fact that that SEC announced its elligibility requiremenst "effective immediately" on Jan 4), but they have decided to go with the flow. Being on the pinks has kept volatility to a minimum and allowed them to have the "luxury" of not having to worry so much about the performance of the stock while the company is in its very delicate formative stages. What's wrong with that? Not only that, but if you want to know something you can call the president of the company and he'll answer your question, and do so truthfully.
Your question, IMHO, is similar to asking me this: Would you advise anyone you know to go to a little league game? I only go to major league games! What kind of stats can you get on a little leaguer anyway? What kind of experience do they have? Look how short they are, and how slow they run! You call that baseball?!? And look at the coaching!?! Very amaturish, if you ask me! Some good points there. Except for the parent whose kid is playing in that game. If you don't know anyone playing in little league, then sure, go watch a major leage team do its stuff. If you have no interest in micro-cap companies just getting started, who are not yet reporting, then fine, go invest in the big guys. Lose your money betting on them instead.
Q: How many Pink Sheet companies have you thoroughly researched?
It is fine to have an opinion about the Pinks. It is fine to have a strategy that limits you from investing in them. I cannot and will not criticize that. I just like to make sure that my opinions are as informed opinions as I can possibly have.
Right now I only own one company trading on the pinks, the one described above. Personally I expect to own more of them soon. Why? because I kind of like the idea of making money. And I see a chance to make some money investing in some of these companies. Just think what will happen to their stocks when they announce they are going to move to the BB and become fully reporting.....!!!!!
Such a strategy is not right for everyone!!!!! I wish all companies could be fully reporting! But until that becomes practical and economically feasible, I'll use some of my gambling money to make more money.
Ask yourself why the congress and the securities regulators do not require all public companies to be reporting companies. Then do the research necessary to get an answer. When you have the answer to that question, you will understand much better how the security laws have been constructed and WHY they are the way they are.
"Being on the Pink Sheets is not just another level, it is the Pits, it is the place where companies that just don't have the goods wind up."
Some people feel that way. However, there are some pretty crappy companies on the NYSE, on the Canadian exchanges, on the OTCBB...and so on.
The people at NQB have a different take on things:
"INFORMATION IN REAL-TIME
The Electronic Pink Sheets, exclusively from the NQB, brings real-time pricing, leading-edge technology, and increased competition and price transparency to the OTC markets. It's a better place for OTC Market Makers, OTC Traders, OTC Issuers and OTC Investors. Using leading-edge technology, the Electronic Pink Sheets are designed to help Market Makers make markets. For complete information visit the PRODUCTS section.
NQB...The OTC Quotation Service
The NQB is a leader in OTC market information. NQB has been collecting and publishing information on OTC issuers, securities and dealer quotes since the turn of the century. NQB information helps Investors make better decisions and Dealers make better markets.
The OTC market is vast and fragmented, encompassing thousands of dealers trading many different types of securities. NQB collects and publishes information from OTC Dealers all over the country that facilitates the purchase and sale of securities in a competitive and efficient manner. Delivering best execution for OTC Investors and increased order flow for OTC Dealers.
Beginning with the Electronic Pink Sheets, NQB is now implementing a leading edge computer facility to collect and publish valuable NQB information real-time across third-party market data vendors and the Internet. Dedicated to serving the OTC markets for almost 90 years, the NQB will remain the pioneering force in OTC price transparency into the new millennium.
THE MARKET OF THE PAST, THE TECHNOLOGY OF THE FUTURE "
nqb.com
We all know how common opinons are. Informed opinions are much rarer. Independently arrived at informed opinions are the rarest of all, and therefore the most valuable.
hope this helps
PCM
GO PABN!!! |
