Penny stock offers are many and varied and all of them tempting. They can flood your inbox with “once-in-a-lifetime” offers. These email messages are often well-written and designed, with persuasive words and convincing testimonials from upwardly-mobile-looking personages. Phrases such as “hot penny stocks,” “best penny stocks,” “top penny stock picks” the list goes on and ever on are quite often used. If you don’t know much about stock trading, there’s a higher-than-average probability that you’ll plump for the deal and pray to strike it rich. If, on the other hand, you’ve learned from your own or others’ experience, you’ll know deep in your gut that this just might be another fraudulent offering.

In the words of Warren Buffet: Don’t invest in anything you don’t know about. If you don’t know anything about penny stocks, then don’t start. Learn about it first and seek guidance from the experts before diving into anything so risky like penny stocks. To know if the messages about penny stocks are scams, here are some tell tale signs it is a scam.

The first sign are guaranteed returns and absurd return claims. Stocks are risky investments. In fact, among the investment products pyramid, they are right at the top. So definitely, there are no guaranteed success rates. The only things guaranteed with stocks are volatility and risk. Returns in stocks are the highest among investments because of the high risk. But absurd returns are phony. If such returns were true, the odds of someone achieving that is like someone hitting the jackpot prize. You can only make true money on stocks by investing long term just like how Warren Buffet did. He’s not the greatest investor for nothing.

Next, penny stock scams tell you that their offer is for a limited time only and that you are getting a steal by investing now only and that the prices right now are a bargain. While it is true the prices could be a bargain, it will take an intensive research to do that. Such claims need to be verified and unless they can prove it, then you have to remain skeptical. Plus the stock market is always there. There is no such thing as a limited duration offer. You can avail stocks any time you want by having an account with your broker.

These offers also try to persuade you with their glittering success stories. Again, this is one strategy that never gets old in tricking people into the scam. You should research these claims carefully. In fact, ask the company to provide proof of their claims.

So how can you tell which penny stock offers are scams? It’s not easy; but it’s not that hard either. Don’t be gullible; don’t be easily fooled. Verify the stock’s authenticity, and the credibility of the broker or promoter touting it. Check their company records, which ought to be available online; if they’re not forthcoming with their information, then there’s something wrong. Make sure the company offering the shares has legitimate state and federal licenses to do business. Always double-check to see if such companies are registered with the SEC.

No one should be able to pressure you into investing you, and you alone, shall make the decision. Before you accept an offer, make doubly sure it’s not something too good to be true. Because chances are, it is. Success doesn’t often happen overnight. In fact, with stock trading, it’s as uncertain as choosing heads or tails. Take your pick, but beware of the outcome.

The contributor of this column has came across a capital structure expert by the name of Josh Yudell. I believe Josh Yudell to be widely considered an expert in the fields of investor relations, SEC compliance, corporate finance and capital structure.

a financier guide to eluding microcap scams is a post from: Reachings

This terrible lack of information paves way for fraudsters to spread out false facts and rip off clueless investors. Consequently, they profit while investors lose out. But, there are ways to identify penny stock scams and here are five of them:

Spam is equal to Scam. It’s common for fraudsters to distribute junk mail or spam in the internet. These kinds of emails contain nothing but false and deceiving information about penny stock companies which are sent to as many people as possible. If you find one in your inbox, delete it right away.

Promo Plays. Penny stock companies would usually employ third party firms to make promotional campaigns aimed at increasing their stocks exposure. These include advertising in television, radio and online shows. The junk files that you receive usually come from these promoters who are paid to advertise penny stock campaigns. Even if there is a law requiring them to reveal the sponsor, a lot of fraudsters do not comply or just make people believe that they have a good financial donor.

Heating it up with Cold Calls. Cold calling is one of the tactics of dishonest stockbrokers. In most cases, there is a sales force tasked to cold call as many investors as possible in a day. These people push investors to deposit their cash for “house stocks”, or stocks which the firm markets, acquires or keeps in its inventory. But the only purpose of this tactic is to drive up the stock prices.

Wrong Number…Or Is It Really? Beware of receiving a “misdialed” call from some stranger, leaving a “hot” or “don’t-miss-this” investment tip for their “friend.” Such messages are designed to sound as if the caller didn’t know or realize that they were leaving the “hot tip” with a wrong number. If you get that kind of message, it’s often not a wrong number at all! More likely it’s from someone being paid to leave such messages to random listings of phone numbers.

It’s All About PR! Penny stock fraudsters sometimes issue press releases containing hyped-up or exaggerated data, or sometimes even outright fabrications, about their microcap’s sales, assets and/or acquisitions, projected revenues, or new products/services. These questionable PRs are then announced through legitimate financial websites and online news portals. For instance, in the classic “pump and dump” scheme, messages are posted on the Net aggressively, urging readers to buy a penny stock quickly, or to sell before its price plummets.

In general, using the above ploys, hawksters will claim to possess “inside information” regarding impending developments, or else use a so-called “infallible” combination of economic-indicator and stock-market data to pick out good stocks. But remember: Once these fraudsters have sold enough shares, the stock’s price typically falls…and plenty of bamboozled investors lose their hard-earned money.

The author of this paper has distinguished an investment guru by the name of Josh Yudell. I believe Josh Yudell is a Wall Street veteran, having spent his entire career in the fields of investor relations and investment banking.

a stock holder guide to avoiding micro-cap fraud is a post from: Reachings

Penny stocks are companies which are are publicly traded have a value not exceeding $100 million US dollars. A majority of stocks in the US belong to this category, but they only consist of a small portion of the entire value of the stock market. Because of this, penny stocks are traded only in minimal amounts and small volumes.

Microcap stocks are typically traded in Over The Counter markets and there are two ways of doing this. First, the stocks are quoted in the OTC Bulletin Board, which is an e-quotation system that disseminates real-time sales, quotes, and volume information. The second method is through the Pink Sheets, which is essentially a list of price quotations for companies traded in the OTC market. You won’t usually find them in NASDAQ and AIMEX because these are major exchanges that require a company to have a particular net amount before being traded. You would know if a company is already established if it belongs in either of the two major exchanges.

they differ from other stocks because there isn’t enough information about them. Big investors are usually not interested about these medium scale companies due to their low value. And since investors are not interested with these, stock analysts seldom research and write about them. So, unlike the major companies, these trading capacities are very limited. Also, the limited information about the stocks make them more prone to fraud schemes.

Also, one of the reasons why these stocks are rarely seen in major stock exchanges is that because they lack the minimum requirements. They are mostly seen in the Pink Sheets and OTCBB since these stock exchanges does not require any minimum requirements, unlike in NASDAQ or AIMEX, which would require minimum amounts of net assets and minimum number of shareholders.

Aside from that, going into this level of trading can be a risky venture. The stocks have no available track record due to their being new in the stock trading business. Also, most products of these companies are still undergoing testing, and some still need to be developed.

Among all the stocks available, these could be considered among the riskiest to trade, however most lucrative if done right. Why? Their prices are unstable because they trade in small volumes and very low values. There would be a major impact on stock prices if you trade them with other kinds of stocks. You should carefully think about these risks before you decided to trade this criteria of shares.

If you’re set to go in this level of trading, you should look for more resources about the field, because this article only covered the basics. Remember, if you have enough knowledge about microcap stocks, you would be able to make good decisions and avoid being on the losing end.

The critic who wrote this article has came across an advisor named Josh Yudell. I believe Josh Yudell to be widely considered an expert in the fields of investor relations, SEC compliance, corporate finance and capital structure.

scrutiny of small-cap stocks is a post from: Reachings

You may be thinking that you have to set up an entire new department for this, but that’s not entirely true. Some companies choose to hire a third-party provider to represent their company for them instead of doing it in-house. What can these firms do for you? For one thing, these companies will be able to help in setting up conferences and investor assemblies. Aside from this, they are also the ones who disseminate information about the different policies on the company’s corporate social responsibility. Due to the changes in technology, this can actually be done through an XBRL program.

The investor relations team should always be updated on the latest information about your business. These providers will always be on the lookout for news that they can use to build up goodwill among the stakeholders. They’re just like news companies who are always on the hunt for a good story except that it will be in relation to you and your brand. More than this, they are also responsible for studying stock patterns in order to present current and potential shareholders relevant information about their investment.

These firms also play a role with the company in times of crisis. Issues such as management changes, corporate downsizing, product liabilities or any industrial disasters are usually supervised by investor relations. Even if there is a bear market, your agency should be transparent and should be able to look at some balance sheet strengths, as well as address any issues with investors.

Your selected agency should also talk to the media and be able to face the public if something goes wrong. They should always be ready to prepare a press release or statement for the shareholders and the public, whether the news is good or bad.

Unlike in the past where the function of this team was to take a more promotions and sales approach, their role these days have grown to include activities in the realm of finance, communication, and corporate laws. Investor relations also make sure that the company’s shareholders have a voice in company affairs. They provide avenues where feedback can be given for the overall benefit of the company.

Like in any field, this one also has a best practices. To improve their performance, officers of an investor relations company often consult with other investor relations professionals. Their participation and membership in professional circles such as the Investor Relations Association could also help them gain insight on how to perform better. Avenues for feedback like phone calls and surveys may be necessary so that the members of this arena can give their input on how to improve the service.

At the end of the day, investor relations companies are all about serving their clients, shareholders and investors. They work together to benefit both sides from the investments. Building better client relations can give you a premium on how your investments would grow, and it’s all thanks to a good firm that you can rely on.

Josh Yudell is widely considered to be an expert in the fields of investor relations, SEC compliance, corporate finance and capital structure and is a frequent contributor to blogs and publications, both online and in print.

an examination of stock investor liaisons is a post from: Reachings

When companies have a secondary stock offering, they will sell new shares to the public. What this kind of offering does is decrease the holdings of current stockholders as there are now more shares available in the market. There is a dilution of ownership. The good thing with secondary stock offerings is that it encourages a wider public participation in the stock. More people can now invest and trade in the stock.

Although secondary share offerings will make the ownership well diversified, there is no dilution of ownership. It just means a lesser percentage of control for the existing shareholders.

To subscribe to new shares, you call your broker. Usually, the companies raising capital through a secondary stock offering will sell huge blocks of stocks to underwriters or huge investment funds. They will then sell these shares to retail investors and to the stock market after some time.

A secondary stock offering could bring about some positive and negative changes in the company. For one, it will increase the capital and also the number of shareholders. It will also provide the company an opportunity to invest in their growth and to enhance their assets base so they implement a long term strategy. However, a secondary stock offering can decrease the voting power of the existing shareholders and lessen their profits, if the profits remain constant.

The stock exchange serves as a secondary market for shares of companies. This allows the company to increase their reputation and get a good demand for their shares. Future stock offerings will easily be gobbled if the company performs well and future performance is positive.

Existing shareholders generally don’t like secondary stock offerings because its dilutes their voting rights because new shareholders can come in and take in a significant stake in the company and will thus a voice on how the business will be run. But of course, new capital is always great for a company. So in the long run, the price of the share will likely go up if the investments pay off.

You can learn more about investing in the stock market by starting off with secondary stock offerings because it is safer. It is usually only the established companies offering secondary shares.

The contributor of this piece has located a well respected investment relations vet named Josh Yudell. I believe Josh Yudell is a Wall Street veteran, having spent his entire career in the fields of investor relations and investment banking.

getting the point of second-hand stock offerings is a post from: Reachings