PennyStocks.com claims to be the internet’s leading penny stock alert website, which provides its members a free newsletter in order to keep them informed of penny stocks that are ready “to soar” in value.
PennyStocks.com says that they choose their stocks based on their evaluation of important criteria: their short and long term growth potential, the company’s growth potential, their products, and the company’s sector of operation.
PennyStocks.com claims that the stocks they alert you to regularly make gains of over 1,000%, and that if you had been following their alerts from the beginning of their newsletter, your gains would be over 40,000%.
Understanding Penny Stocks
The actual name of penny stocks is microcap stocks or small cap stocks. These are stocks that trade under $5 a share, though penny stock alert companies tend to concentrate their focus on stocks that trade under $1 a share.
PennyStocks.com readily admits that most traders and investment teams will not advocate buying penny stocks, as their low price makes them a risky investment.
Because penny stocks are so inexpensive, they can be easily controlled by one individual’s influence. For a manageable amount of money, a single company or investor can purchase hundreds or thousands of shares.
This large scale purchase will raise the value of the stock, allowing the investor to use this gain to convince others of the stock’s potential, encouraging them to buy. After others purchase the stock, the original investor sells their shares, and walks away with a profit while causing the stock’s price to fall.
Is PennyStocks.com Legit?
Unfortunately, both the Disclaimer and the FAQ sections of PennyStocks.com explain that they are not actually an investment company. Rather, they are a marketing and advertising company that is paid to promote certain stocks.
PennyStocks.com says that they do not actually employ any investment bankers, advisors, or analysts, and that their penny stock alerts should not be interpreted as advice to purchase any stocks or invest in any company.
As always with any investment opportunity, you should never invest money that you cannot afford to lose, as that is always a reasonable risk with the stock market. But if you are looking for investment advice, you may wish to seek advice from an actual investment company, rather than a company that receives compensation for promoting stocks.
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Why would someone pay to do this? THEY ARE SELLING!
When the promotion stops, the stock drops like a rock and not enough volume to sell and get out.
Stay away from 'free' stock sites, they cost more than a good subscription site, for sure.