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Why do people trade OTC penny stocks of small companies that are almost all deeply flawed with continual share dilution and little to no prospect of future viab
by nugget 9y ago
Why do people trade OTC penny stocks of small companies that are almost all deeply flawed with continual share dilution and little to no prospect of future viability?
I see ICOs as the more hip cousin of the OTC penny stock. 1 in 50 will turn into a real business and support the narrative that this is legitimate investing and lottery-style wins are possible. The rest will be traded up and down for speculation and entertainment, most eventually headed to 0, to be replaced in a continual cycle by new ICOs with new operators, new narratives, and new speculators. The tech is different but the human nature it taps into is the same.
- snarf21 9y agoRight, at best this is gambling. At worst, it is a pyramid scheme in the offerings that never intend to ever really even try to make something of value.
- CryptoPunk 9y agoAt best it's seed investment. You seed 100 projects that show promise and hope one of them is a home run. VCs do something similar, with 90% of their investments failing. The quality of token investing really depends on the due diligence done and the investment strategy pursued by the token buyer.
- aaron-lebo 9y agoThe problem is when you have 100,000 amateur investors, the likelihood of due diligence drops pretty dramatically and the strategy usually consists of "this looks good".