Like small-cap stocks, penny stocks have a small market capitalization; that is, the total value of outstanding shares is relatively low. Unlike classic small caps, the total value of penny stocks can be low simply because the price per share is vanishingly small. Then there is the low total value despite very many outstanding shares.
For small caps, however, the low market capitalization is solely due to the fact that relatively few shares were issued. The market value of the shares can be relatively high.
Buy penny stocks online -Penny Stock Air Berlin share
In 2017, everyone was talking about a famous penny stock in Europe in particular: The shares of the now bankrupt airline Air Berlin. The stock shows quite well how dramatic and lasting a price decline on the stock exchange can be. Air Berlin went public in 2006. The share price fell continuously since the beginning of 2007.
In September 2015, the price was below the 1 euro mark for the first time. As a result, the price has not left the cent area – except for a one-week break above. In autumn 2017, shortly before the planned sale to Lufthansa, the penny stock is quoted at just under 17 cents (as of October 16, 2017).
Buy penny stocks online -Long-term investments always have priority
Investors should be wary of dealing with penny stocks for the reasons described. That means first and foremost: Better not put too much capital into penny stocks. As a long-term investments, penny stocks are not suitable, because the probability that they eventually worthless, is much higher than regular shares or even mutual funds.
In comparison, these are quite secure investments in the long term. Investors are therefore usually better advised to trade classic, well-performing stocks.For more about the “buy penny stocks online” matter, stay tuned our finance platform.