26
January
2017

Penny stock /

Penny stock

Business Term of the Day

Definition

Penny stocks are low-value shares of public companies, typically traded outside main markets.

Example sentence

Even though I tried to convince James that he should not invest in penny stocks, he did not listen and lost all his money.

Comment

Penny stocks are referred to as penny shares in the UK. The name originally referred to stocks priced under one dollar but now can also refer to those priced up to USD 5. Because these are over-the-counter securities, the issuers are not obliged to publish as much information as is required in the case of listed securities. As a result, penny shares are less traded. Due to this low liquidity, owners of penny stocks may find the stocks hard to sell. This situation also makes them easily susceptible to fraudulent practices such as cornering the market and pump-and-dump schemes, even though these securities are subject to regulations intended to protect investors.

Definice

Penny stocks jsou málo hodnotné akcie veřejně obchodovaných společností, typicky obchodované mimo hlavní trhy.

Příklad použití ve větě

Ačkoli jsem se snažil přesvědčit Jamese, že by neměl investovat do penny stocks, neposlouchal a přišel o všechny peníze.

Poznámka

Penny stocks se označují jako penny shares ve Spojeném království. Tento název původně označoval akcie ceněné pod jeden dolar, ale nyní mohou označovat také akcie oceněné až do 5 USD. Protože to jsou mimoburzovní cenné papíry, emitenti nejsou povinni zveřejňovat tolik informací jako jsou povinni pro kótované cenné papíry. V důsledku toho jsou penny shares méně obchodované. Kvůli této nižší likviditě může být pro majitele penny shares obtížné je prodat. Také jsou kvůli tomu snadno náchylné na podvodné praktiky jako vytvoření dominantního postavení nebo pump-and-dump, ačkoli tyto cenné papíry podléhají regulacím, které mají investory chránit.

Business Term of the Day

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Simply subscribe to receive our Business Term of the Day at no charge to your inbox each business day, with explanation in English and Czech.

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