| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
I wonder if anyone has been through this before -- I own 500 shares of a tiny stock that has recently been dropped from WSJ's NASDAQ Small Cap listing. I am able to get quotes on it, but it seems to always be listed as having zero volume. Do shares in little companies like this that have declined in value simply stop trading hands? Will I have difficulty unloading it? What do the bid/ask prices mean if no one's trading? etc? Thanks, Mark
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 362.1 | This is a problem with low-volume issues | PACKED::PACKED::PERIQUET | Dennis Periquet | Mon Feb 01 1993 10:45 | 18 |
I think this is just one of those problems with buying stocks that are
not that popular (is this a pink sheet stock?). The stock may have
value but there is a liquidity problem and it may be difficult to
unload because not too many people are trading it.
When considering buying stocks, one should consider that the risk is a
function of business risk, financial risk, exchange rate risk, and as
in your case liquidity risk. Business risk refers to the risk inherent
in the company's business. Financial risk refers to the amount of debt
the company has (the more debt, the more risk). The rest is self ex-
planitory.
Regarding bid/ask prices when no one is trading, there will probably
still be a spread for the broker. Do you know what's going on with the
company? Chapter 11, etc.?
Dennis
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