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The answer is it depends. Some penny stocks are the remains of once profitable companies that were delisted for one reason or another and are trying to rebound. Some of them are small start up companies that may actually have a future (these are a minority). Most are companies that are all hype and no substance or companies waiting to go bankrupt. I know a guy at work that dabbles in penny stocks, he says he has made some money off them but he also researches the hell out of them and tries to stay away from the scams.
The problem with penny stocks is a low float (the number of shares available to trade) and low volume. You might buy a penny stock at one price and then someone else dumps a bunch of stock on the market and the price falls. Penny's are commonly very volatile and highly risky.
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Rick
1984 911 coupe
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