USA Today's Matt Krantz reports that shares of some companies bankrupted by the financial crisis have posted huge gains in recent months: "Lehman and WaMu, for instance, were booted from stock exchanges and filed for bankruptcy protection. Yet on the lightly regulated Pink Sheets markets, this year their stocks are up 500% and 1,050%, respectively."

The problem is that shares of companies like Lehman and WaMu are completely worthless with no prospect for recovery for shareholders. Ownership of the company's assets is no longer held by the common stock -- and with creditors taking losses, there is no chance that shareholders will receive a nickel.

Continue reading Memo to SEC: Put the zombie stocks out of their misery

Memo to SEC: Put the zombie stocks out of their misery originally appeared on BloggingStocks on Tue, 13 Oct 2009 17:30:00 EST. Please see our terms for use of feeds.

Continue reading Interested in buying some General Motors stock?

Interested in buying some General Motors stock? originally appeared on BloggingStocks on Thu, 20 Aug 2009 18:10:00 EST. Please see our terms for use of feeds.

Continue reading Sirius XM Radio gets an upgrade from S&P -- surely you can't be serious

Sirius XM Radio gets an upgrade from S&P -- surely you can't be serious originally appeared on BloggingStocks on Wed, 15 Apr 2009 09:40:00 EST. Please see our terms for use of feeds.

My core investment strategy of trading strong penny stocks (which earned me 197% last year) has clearly benefited from the overall market's strength of the past few days. While I'm looking at these following five names, I'm not rushing into them just yet. Each has a different story to tell:

Ferro Corp. (NYSE: FOE), a struggling industrial materials maker whose stock price has plummeted in the past six months from the $20s to $1, basically doubled to $2 after the company amended its financing agreement -- meaning its lenders gave it some breathing room.

Continue reading Five stocks under $5 to consider

Five stocks under $5 to consider originally appeared on BloggingStocks on Thu, 12 Mar 2009 13:00:00 EST. Please see our terms for use of feeds.

Continue reading NYSE suspends $1 rule

NYSE suspends $1 rule originally appeared on BloggingStocks on Fri, 27 Feb 2009 10:50:00 EST. Please see our terms for use of feeds.

This week, I've been working on a list of penny stocks to buy. Given that any recovery is likely to be led by the small-cap space, I'm looking closely at the smallest of the small to drive my portfolio higher.

Not for the faint of heart, these so-called penny stocks can generate some really fat returns. I'm not talking about just doubling your money here. Stories abound of returns of 300% or much more on stocks that started out trading for less than $5 per share.

One of the stocks on my list is in the poker space, and to give you a bit of a preview, I want to visit one other player in the space that was worthy of consideration, but did not make the final list.

CryptoLogic (NASDAQ: CRYP) is a leading provider of software for the Internet gaming space for non-U.S. players. It is that last piece about non-U.S. players that has me quite excited about the stock.

The company has benefited from the explosion of online poker playing, but stagnated due to tough enforcement of rules and regulations against U.S. players. It is illegal to gamble online, and that is a huge problem for companies like CRYP.

My take on this stock is that regulations will change for a few reasons. At the top of the list is a new administration that claims to bring a non-lobby-based form of governing to Washington.

That means the Vegas lobby is out of luck when it comes to online gaming. Every other modern country allows it, why not ours?

Another big plus is the taxable revenue that would come from legalizing online gaming. Given the economy and massive debt loads, one would think this would make sense.

I think the space makes for a reasonable speculation, and CRYP looks like a strong play in my opinion.

With shares at $2 and change, off a 52-week high of $21.97, there is plenty of fuel here.

Of course, there is risk, but that's what penny stocks are all about.

I am merely suggesting that there is a legitimate trigger here for some serious upside. Sometimes that's all it takes for a penny stock like CRYP to take off.

And if you're interested in penny stocks, be sure to check out my Top 5 Penny Stocks to Buy Now.

Jamie Dlugosch is a contributor to InvestorPlace.com.

Online Poker Play: CryptoLogic (CRYP) originally appeared on BloggingStocks on Fri, 12 Dec 2008 10:30:00 EST. Please see our terms for use of feeds.

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he'll offer advice to investors who are just getting started.

In today's market it seems every stock is a bad stock. Doesn't matter what you buy. It goes down. But I'm not talking about good stocks caught in a bad market. This is about bad stocks with no earnings and no real prospects, the ones with great stories but nothing else. Lots of promise, but no profits.

There are lots of bad stocks, many more than good ones. Any prudent investor should avoid them. But most of us don't. There's always a story that seems so compelling, so right, so possible, that many of us buy a bad stock even though it has no earnings, or racked up huge losses. It's only human to hope for the best even when the facts tell you the odds are against success.

Continue reading Comfort Zone Investing: How to buy bad stocks

Comfort Zone Investing: How to buy bad stocks originally appeared on BloggingStocks on Sat, 15 Nov 2008 10:30:00 EST. Please see our terms for use of feeds.

My only penny stock is SpaceDev Inc. (OTCBB: SPDV) and I am not recommending you buy any. I do not recommend any penny stocks and will leave that to others.

If you did buy some, it would probably move the stock because the trading volume is so low that you can actually have an impact. I'm losing a few hundred dollars over the course of about two years.

I bought the company after I had witnessed both launches of Space Ship One into sub-orbital space and wanted to keep track of this interesting company that created the motor and fuel technology.

This week, the company announced that its devices successfully landed on Mars. SpaceDev "provided a wide array of hardware and instruments for the Phoenix Lander that successfully landed on Mars' north arctic plane Sunday, May 25th at 4:53 pm PDT."

SPDV closed Wednesday at $0.62, unchanged. Its 52 week range is $0.51 to $1.05. There are no significant metrics worthy of discussion, but as a shareholder I am supporting an important aerospace company that is designing and building cutting edge space-age technology and keeping me informed and educated. It is located in Southern California, allowing me the opportunity to visit the company easily.

There is little chance of a big financial reward, unless one of its technologies finds some broad popular use, but sometimes there are other things in life that mean more.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of SPDV.

SpaceDev went to Mars in style originally appeared on BloggingStocks on Thu, 29 May 2008 11:40:00 EST. Please see our terms for use of feeds.

Profit from penny stocks touting themselves originally appeared on BloggingStocks on Mon, 17 Dec 2007 16:17:00 EST. Please see our terms for use of feeds.

10 stocks under $10: A bargain hunt for your portfolio originally appeared on BloggingStocks on Thu, 29 Nov 2007 07:36:00 EST. Please see our terms for use of feeds.

Continue reading Pumping penny stocks on CNBC

Pumping penny stocks on CNBC originally appeared on BloggingStocks on Mon, 26 Nov 2007 17:30:00 EST. Please see our terms for use of feeds.

• Back in June of 2006, MarketWatch's Chuck Jaffe wrote up a company Electra was involved with as his Stupid Investment of the Week. Jaffe received a phone call featuring the prerecorded voice of Carmen Electra, touting a company called Luvoo.com (OTC PK: LUVT). Shares of that company have since collapsed to 8 cents per share.

• Electra also signed on as a spokesman for a company called eFoodSafety.com (OTC BB: EFSF), and the company put out a press release hyping her involvement.

• The most interesting one: Payment Data Systems Inc. (OTC BB: PYDS) is a tiny microcap that announced its Carmen Electara prepaid Mastercard last year. Here's where it gets potentially shady. The company paid penny stock shill Jonathan Lebed $25,000 for a one-month investor relations contract that mainly consisted of sending out emails to his subscribers touting the stock with messages like "Combined with PYDS's new Carmen Electra debit cards and many more celebrities coming soon, it doesn't get much bigger than this!!!"

• For those of you who don't remember, Lebed made headlines in 2000 when he settled SEC charges of stock manipulation -- at the age of 15. Ever the self-promoter, Mr. Lebed posted a YouTube video of himself rubbing elbows with Ms. Electra.
  

Is Carmen Electra selling herself to shady penny stock promoters? originally appeared on BloggingStocks on Mon, 22 Oct 2007 14:25:00 EST. Please see our terms for use of feeds.

It used to be that you could avoid ads for fraudulent stock promotions if you didn't open up spam emails and managed to stay off the lists of boiler room cold-callers and mail houses. But now these thugs are taking out ads in top newspapers, according to The New York Times (permalink).

Such venerable publications as The New York Times and USA Today (by venerable I meant The Times) are featuring full-page ads touting "emerging growth" companies. If you want to know what that is, take a look at the insightfully sardonic Penny Stock Player's Dictionary:

Emerging Growth Company -- an implausible story about a hypothetical business.

Emerging Growth Stock -- a scam.

Continue reading Shilling for penny stocks: Are top newspapers that desperate for advertisers?

Shilling for penny stocks: Are top newspapers that desperate for advertisers? originally appeared on BloggingStocks on Fri, 07 Sep 2007 15:20:00 EST. Please see our terms for use of feeds.

I hate penny stock spam as much as the next guy, and Kevin Kelly wrote an interesting piece on the SEC's efforts to crack down on it. But whenever I hear about this stuff, I have to wonder: How stupid do you have to be to buy a stock because you receive an email from someone you don't know saying that a stock you've never heard of is going to da moon?

A recent Associated Press article referred to the SEC filing charges "against two Houston-area men, accusing them of hijacking personal computers to send out spam e-mails and bilk investors out of $4.6 million." (emphasis added)

First of all, someone who buys stock based on a spam email isn't an investor. In fact, I can't even type the word I would use to describe someone who does that because BloggingStocks is supposed to be PG. And I would argue that these "investors" really bilked themselves out of $4.6 million through their unbridled greed and gullibility.

I don't think that the people who lose money on these penny stock scams can be characterized as victims. Their downfall is exactly the same as that of the perpetrators of these crimes: Greed.

Is stock spam really a big deal? originally appeared on BloggingStocks on Thu, 19 Jul 2007 18:10:00 EST. Please see our terms for use of feeds.

When it comes to getting started in stock investing, many of us (myself included) look at the volume of information that's available and instantly become nearly overwhelmed with the sheer magnitude of it all. There's so much to learn about the markets. There are so many directions one could go. How does a person who just received a $2000 windfall take that money and invest it for himself or herself? How to find a broker? How to create and diversify a reasonably safe portfolio? There are a million questions that can be asked. Where are the answers and how much information is actually necessary to learn to make a safe start? I don't have that $2000 windfall to invest but I have that desire so I had a look around and I found out about investment clubs.

Investment clubs are kind of like mini mutual funds. They can be a very small coalition of amateur investors who have pooled resources to buy stocks and create a portfolio, or they can actually be groups that become large enough to form their own limited liability corporations. The magic lies in the fact that they don't have to bear the management fees associated with true mutual funds and the members most often vote on the choices of stocks their money will be invested in. This significantly reduces operating costs and helps small investors realize better returns from their invested funds.

Members of investment clubs have some serious advantages over the small investors who try to do it alone. They get input and support from the other club members. They get the benefit of a wide range of investment viewpoints. They get purchasing discounts through the increased volume of each stock purchase they're involved in and they get the comfort of knowing that there are other investors who are willing to take the same risks they are. It's a team concept and some people have gotten very wealthy utilizing it.

Continue reading Investment clubs: Getting started can be easier than you thought

Investment clubs: Getting started can be easier than you thought originally appeared on BloggingStocks on Mon, 18 Dec 2006 14:22:00 EST. Please see our terms for use of feeds.

Over the counter (OTC) stocks interest me but the pink sheets appear to be too risky. What is it I find most intriguing about OTC stocks? They allow a person with more nerve than money to break into the stock market game. Pink sheets and penny stocks are historically the most risk prone investment vehicles. They're kind of like a trip to the casino. Going in there requires the investor to be prepared for the real possibility of leaving some money behind. OTC stocks on the other hand, provide a noticeably bit more security and some are actually stocks from very solid companies that are just unable to meet the price and volume requirements of the large stock exchanges.

The OTC Bulletin Board is the place to find out what OTC stocks are available. There are surprises on the OTC with some business names we all recognize. Others, I've never heard of. There's one thing for sure, it's a lively place where there is money to be made. If someone is entering the sport of stock trading, the OTC BB can be an excellent place to get started in my opinion.

OTC stocks require some special investment knowledge. Knowledge not in the sense of special analytical skills, but in the sense of having the desire to pick some winners and the patience to do some foot work. Making prudent investments in OTC companies, requires learning about them. There must be willingness to do some research about potential prospects. The more research done, the higher quality the knowledge will be. The trick to the sport is to find the companies that are ready to go upward. If the timing is right, then the possibility of actually making some dollars exists.

I'll be writing more about getting started with stock trading. Taking things easy may be my best bet. It's been an awfully long fourth quarter this year but let's just hang in there.

OTCBB and the Pink Sheets... Why would I like them? originally appeared on BloggingStocks on Tue, 12 Dec 2006 10:34:00 EST. Please see our terms for use of feeds.