Penny Stocks Are Dead! – What Is the Alternative?

As brokers, FINRA, and the SEC implement more and more rules and cautions to protect investors from the potential fraud that has invaded the penny stock market for years and years, it has killed off the ability to list and raise money for a legitimate development stage or young expanding company.

What is the solution?

The solution for those of you who have legitimate companies is to use the OTC listings and/or foreign listings as a first step in a comprehensive strategy to raise money, develop your company and then up-list to a higher exchange like NYSE  or NASDAQ etc.

Don’t be discouraged, there are still plenty of ways for a legitimate company to maneuver and take advantage of a public listing to grow and develop their young company – remember going public is not always about raising money. Going public has many other advantages and leverage points to develop your company.

For Example:

Used as a leverage tool it is a way to:

• Leverage a larger retention of ownership then achieved with other forms of financing such as venture capital
• Grow your company faster and make it more powerful by attracting top personnel without necessarily huge cash outlays. (Sometimes these personnel bring with them, investment money, contracts, or clientele).
• Grow your company faster and make it more powerful by attracting top notch team members to your board of directors. (With the same implications as above.)
• Raise money faster and cheaper by increasing the “liquidity” factor for your investors.
• Grow your company faster and make it more powerful by increasing your ability to attract “mergers”, “acquisitions” and “strategic partners”.
• Grow your company faster and make it more powerful by increasing its ability to compete for large corporate or government contracts.
• Leverage your personal return on investment as an owner by decreasing the amount of time it will take you to make money on your investment, as well as increasing the valuation of your company by sometimes enormous multiples over the valuation of a private company, as well as, changing the liquidity of your asset to a much more liquid form than that of a private company.
• Grow your business faster and make it more powerful by increasing your status in the eyes of all those you do business with.

Also remember there are many alternative ways to raise money, and your investors will eventually be better served by an up-listing to a major exchange than trying to liquidate your penny stock on the OTC. Even growing your company to the point it gets out of the penny stock definition (Less than $5 a share) will better serve your investors and create liquidity even on the OTC.

In the meantime, while growing your company, consult us for ways to protect yourself and your shareholders from dilution and shorting an other deleterious practices we find on the OTC. We are specialists in restructuring companies to survive the OTC, help them grow and qualify to up-list to a higher exchange.

 

 

For All of your INCORPORATING needs contact Samuel Wierdlow Inc. (www.SamuelWierdlowInc.info)