Why do Stock channels and sites bad mouth penny stocks and never mention the people who make loads of money?

Question

I have seen many stocks go from .01-$1.00 but never get talked about anyplace.

Penny stocks are the best way for anyone to get rich in this country.

Is that maybe why they bad mouth them? They dont want everyone investing in them and becoming rich?

Oh and GZFX is the next big company.

What your saying is not true. This is what everyone thinks but they are totally wrong.

They do not all fall into the scam catagory. I followed them for a few years and fortunes are being made every day guy.

Sorry.

No. But it is not every day a penny stocks get a deal with Circuit City nationwide.

If you did your homework like I did very well you will see that Netflix does not rent video games but GamezNflix does.

Service is rated very high also. With video game sales going through the roof, they have a big chance at taking on Netflix.

Yeah the high OS is a drawback but if the company is growing fast like they are, a reverse split will take care of the share problem later on.

Maybe im just good at spotting the next big company and others just don't see it.

In 2007 I think GamezNflix will be mentioned on CNBC. Lets see if im right.

Answer 1

Penny stocks are not a scam. Penny stocks are speculative. There is the potential for making a higher return, and the potential for losing all of your money.

Some people prefer a higher probability of a modest but fairly certain return, rather than losing all of their investement in 99 penny stocks, and a superb return on 1 penny stock.

The market offers freedom of choice. Penny stocks are one of those choices.

Answer 2

You're right. Penny stocks are a legal form of gambling, and we shouldn't say otherwise. But I'm not sure why they are any better than the lottery. At least with the lottery, you know that someone is going to win, and that the people running it are only taking a fixed percentage. With penny stocks, you can assume that the shysters who run the game will take their millions off the top and leave just enough on the table to keep your appetite whetted so you'll play their game again.

Stocks are wonderful investments, and occasionally there is a rare "penny" stock that makes real money. But 99% of them are bogus companies or, at best, companies that have no substance or ability to produce anything viable. Yes, people can buy in early on a stock being "touted", and can get out before it collapses, and get rich off of the greater stupidity of OTHER gamblers. But, if you don't understand the stock market, the chances are high that you'll lose more often than you win. And, if you truly understand the stock market, you'll know that there are FAR BETTER stocks to invest in, and still have a chance to become wealthy, while taking far less chance of going completely broke. Penny stocks are an excellent way to go broke.

But, we all know you're just a stock touter yourself, and you bought in to GZFX, and are hoping for other people to be stupider than you and push it higher so you can jump out and leave them holding the bag. Whatever!

Answer 3

You're right, it isn't illegal, so it isn't a scam. And somebody certainly gets rich when a stock goes from one penny to one dollar. It's just generally the original stockholders in the new startup company, and not investors that come later. You are looking at price charts or a spectacular rise, and assuming you could get rich from it. Assuming is dangerous. To ASSUME, makes an *** out of U and ME.

For every legitimate phenomenal price increase as you describe, there are several, maybe dozens more that Pump and Dump.

The float on these stocks is so small, that anyone with a few million dollars can escalate the price astronomically. As soon as the requisite number of people are drawn in, it goes back down.

If you look at a list of the top 100 Mutual Funds, you'll see that the smallest one on the list controls in excess of 50 billion dollars. They could invest in thousands of penny stocks, and invest only a few hundred million dollars, because the stock price is so low, and because of the small float. If all thousand penny stocks doubled in value, it would not effect their bottom line significantly. And if they wanted to get out, they would tank the stock price. There is no liquidity in these stocks for the big players. So there is no following.

The media are not in a conspiracy against small companies. Until a company can prove it's mettle, prove its staying power, prove it can be profitable, a mere stock price fluctuation is not going to attract attention. Stock prices fluctuate every day in all stocks.

The name of the game in investing is capital preservation, not rolling the dice to see how big of a risk we can take. Someone with a million dollars is not interested in doubling their money to "get rich." They are already rich. Why would they take the risks of a small startup over something they know about like a Blue Chip stock? Again, no following.

You have to understand that the pro evaluates an investment from the standpoint of risk, not how soon it will double. The risk in these penny stocks are enormous, incalcuable, and in most cases, insurmountable.

Answer 4

I completely agree with you that penny stocks are the way to an accelerated income in the markets. Investors in penny stocks are forced to do three times the research that someone who buys Microsoft or Apple does because there is not information readily available on many of these issues. They don't have to report their finances as in-depth because of SEC filing regulations on the pink sheets and bulletin boards.
89% of the penny stock companies are made of good guys trying to get their business started so they can move up to the Big Board. It is the American Dream to be able to do that...not to mention that they will get filthy rich in the process. There are shysters, sure, but once you get used to what to look for, they are fairly easy to spot.

The best thing to do is research the charts and the profiles thoroughly for these companies. Take Gameznflix, Inc. (GZFX) for instance. I wouldn't touch this stock with a ten-meter cattle prod. The stock is going nowhere fast. The float on this stock (the number of shares outstanding...) is an astounding 4.09 Billion (that's a 'B' as in Billion...) shares. The 200-day volume average is 124 Million shares a day. A 124 Million shares a day! That means that in order for the stock to move one cent, 12 Million shares would have to agree with you! That's just insane.
GZFX is what we call a little diluted.
The chart says that it has flat-lined at less than one-half of one-half of a cent per share. Sorry, man, but this stock is going nowhere at all.

Find penny stocks that are trading above $0.35 cents and are making new 52-week highs consistently. Buying ten million shares of a heavily diluted stock like GZFX is not the way to play the pennies.

Best of luck to you!

Answer 5

Penny stocks are a scam. People buy into them and then speak up on them to others so then the price goes up and they sell out. Alot of penny stocks are companies with no revenue or bankrupt or starting stage.
Plus if the tv people talk about them the stock will go way up for no reason if people buy into them. There is a reason why they are worth nothing.

Answer 6

You said you did your homework on GZFX, and you're not just "hyping it up". Perhaps you could answer some of these very basic questions.

How much revenue did they have last quater? Last year?
How much did they earn last quarter? Last year?
What is was their free cash flow last quarter? Last year?
What is their current market cap?
What is the value of their liquid assets?
How much debt do they have and what kind of debt is it?
What is their current quarterly cash burn rate?
What are the names of the companies officers, and are they buying the stock?
Who are the other major shareholders?
What are your expectations for revenue, earnings, and cash flow over the next couple of years?

If you know the answers to these questions, please post them, and I'll apologize.

If you don't know the answers to these questions, you are what is known as a "pumper". A pumper is someone who buys a stock with a good story (like "they're the next Netflix"), and hypes it up everywhere they can (like here) trying to "pump up" the price so they can sell at a profit.

Good luck with your "investment".