An OTC stock is one that is unlisted and doesn't trade on an exchange. For some, being unlisted indicates a company that is extraordinarily risky with high potential for fraud. In other words, uninvestable. But for others (like me) unlisted stocks are merely a different category of stocks with their own advantages and disadvantages. Still, those of us who consider unlisted stocks part of our investing universe should ask ourselves just why a publically-owned company would choose to remain unlisted. After all, the norm for companies with a significant number of shareholders is to list on a national exchange. Listing on the NYSE or NASDAQ is costly, but the cost is surely more than covered by the benefits of increased liquidity and the higher valuation afforded listed companies.
Why Be Unlisted?
Why Be Unlisted?
Why Be Unlisted?
An OTC stock is one that is unlisted and doesn't trade on an exchange. For some, being unlisted indicates a company that is extraordinarily risky with high potential for fraud. In other words, uninvestable. But for others (like me) unlisted stocks are merely a different category of stocks with their own advantages and disadvantages. Still, those of us who consider unlisted stocks part of our investing universe should ask ourselves just why a publically-owned company would choose to remain unlisted. After all, the norm for companies with a significant number of shareholders is to list on a national exchange. Listing on the NYSE or NASDAQ is costly, but the cost is surely more than covered by the benefits of increased liquidity and the higher valuation afforded listed companies.