Stocks: can you explain common stocks that trade on "pink sheets" to me in laymans terms?

It seems that the company I am looking at just went public and is starting with a very low amount (under 20 cents). Can the public buy stocks? Would employees be getting some as a benefit?

I am considering contracting with the company- so curious about what I should know and what kinds of questions I should be asking if any. Asked by OrangeApple 53 months ago Similar Questions: Stocks explain common stocks trade pink sheets laymans terms Recent Questions About: Stocks explain common stocks trade pink sheets laymans terms Business > Financial Planning.

Similar Questions: Stocks explain common stocks trade pink sheets laymans terms Recent Questions About: Stocks explain common stocks trade pink sheets laymans terms.

Quick Answer: Stocks that trade on Pink Sheets are similar to stocks that trade normally. I will try to answer all aspects of your question. Yes, the public can buy the stock of this company.

Essentially, before the company went public, it was owned by a few private owners (maybe the CEO? ). Upon going public, the company is sold from its private owners to the public.

Now that the company is owned by the public, its current owners can sell shares (Pink Sheets) to other people who want to own part of the company. If you want to buy some shares (shares represent partial ownership of the company), you will be buying the shares from a current owner, who has previously purchased the shares. When you make this purchase, the money goes to the person selling you the shares.

None of the money you spend to purchase shares will go to the company or its employees. The company could have received money from the IPO, but it will not receive a benefit from pink sheet trading. Pink Sheet trading is similar to normal stock trading.

The main difference is that pink sheet stocks are often very small companies, and the trades are made directly between individuals. Also, pink sheet companies do not have to fulfill the SEC requirements that other companies that are public have to fulfill (thus, Microsoft has to comply with many SEC rules, while 'pink sheet' companies do not). This makes trading in pink sheet companies a little more risky.

Small firms who do not want to, or cannot afford to comply with the burdensome rules often choose to have their shares traded as 'pink sheets'. Most of this, except for the extra risk of no SEC regulation, should not make a difference to a small investor. If you are considering contracting with the company, I don't think that this would make a big difference to you.

You might want to know why the company decided to go public, how much money they raised, and what are they doing with the money? Some firms go public sot hat they can quickly raise cash through the IPO so that they can rapidly expand. Other companies go public because the large owner (sometimes the CEO) just wants to cash out, and wants to own cash that he/she can spend rather than owning the company which he/she cannot spend.

My question to you would be 'Why do you want to purchase shares in this company? ' I would suggest pink sheet investing for experienced investors. As a subcontractor, I would stick with the subcontracting work, which should be fine.

I see no reason why you should be mixing your work with your investing goals.

Pink sheets" are OTC quotes for securities. Yes. Usually.

Get paid well, on-time, and in-full. Answer Summary:"Pink sheets" are OTC quotes for securities. Yes, Public can buy stocks.

Usually, employees may get a stock benefit. Get paid well, on-time, in-full, and hopefully have future stable work. -------------------------------------------------------------------------------------------"Can you explain common stocks that trade on "pink sheets" to me in laymans terms?

""Pink Sheets" are "over-the-counter" securities (bonds, stocks, ...) quotations from broker dealers, which used to be on "pink" paper before the electronic system:http://WWW.PinkSheets. Com/http://en.wikipedia.org/wiki/Pink_SheetsU.S. Securities & Exchange Commission information about "Pink Sheets":http://www.sec.gov/answers/pink.htm"Pink Sheets" involve companies who either:- do not meet minimum requirements in order to be listed on a securities exchange, or- who chose not to apply for a securities exchange listing for whatever reason.U.S. Securities & Exchange Commission information on Securities Exchange listings:http://www.sec.gov/answers/listing.htm---------------------------------------------------------------------------------------"Can the public buy stocks?

"Yes, if the company chooses to either sell shares directly orif the company or current stockholders choose to sell shares through "pink sheets". The issue / problem usually is not buying stocks, but selling them. If you hold "pink sheets" stocks (or an exchange-listed stock)its value or worth is only what someone else is willing to purchase it forless any commissions or fees involved in the transaction,otherwise they are just "worthless" papersecured by the assets less the liabilities of the corporation if/when liquidated.

-----------------------------------------------------------------------------------------"Would employees be getting some as a benefit? "Usually, for smaller companies it is less expensive for them to pay in stock or options rather than dollars. But not necessarily, some private companies want to control their ownership and limit it to immediate family, a few individuals, or specially chosen investors who the corporation has some other business relationship with (like their best customer or their best supplier).

As a potential employee or contractor,you can always ask what stock benefits, bonuses, discounts, grants, options, ...are available and what you need to do to earn them. Sometimes they are given out as a "signing bonus" in lieu of higher compensation in "real" $. ----------------------------------------------------------------I am considering contracting with the company-so curious about what I should know and what kinds of questions I should be asking if any.

If you are "contracting" or a (materials/services) supplier for them,your concerns should be:- your compensation, will it be profitable, timely? - future work and stability, how "good" and stable a customer will they be for you? Do they pay their bills and vendors on time, and in-full?

What do their long-term financials, and business prospects look like? For more information or assistance,contact me LeheckaG on AskVille. Sources: My professional experience and personal opinion .

Bad signs Most stocks trading under a dollar are a) either close to bankruptcy and the prices have fallen to reflect this, or b) are trading on the pink sheets because they do not qualify for the listing requirement of the various exchanges. These listing requirements are designed to protect investors from scams and companies that are in poor condition. The best advice I can give is avoid the stock.

If you do contract work for them, I would make sure they can pay cash before investing too much time or effort. The few times that one of these companies turns around to make a recovery are far outweighed by those that go to zero.

1 The company has plans to rapidly expand .

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In laymans terms, please explain the process of inflation.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.