CANNAINVESTOR Magazine February / March 2017 - Page 48

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How OTC Companies and Penny Stock Investors Can Use Social Media

By Celeste Miranda

At one point penny stock investors believed that the only way to be successful was to scour the penny stocks in hopes of finding the ‘next big thing’, but nowadays there are completely free ways for companies within the penny stock market to get noticed by investors.

Penny stocks, according to the Security & Exchange Commission (SEC), are any stock that costs less than $5 in the open market. There used to be a lot of risk with investing in penny stocks and most people who watch the market buy big in hopes of selling to interested buyers later. One issue that investors have with penny stocks is that they can’t do in depth research on the company, it is also a red flag that these companies usually have less history. It can also be an issue that there is low liquidity which creates a larger opportunity for fraud. The funny thing about these two issues is that the latter is completely dependent on the former. What I mean is, if the company can become more transparent then they will sell their stock which will, among other things, create more liquidity. A great way to become an open book is to build an active social media presence. This doesn’t just require building social sites on all of the popular platforms, it means interacting with their audience and getting them talking about their company.