Penny Stocks and Press Releases

Even though not a lot of information is available on the businesses that trade penny stocks, there are still quite a few press releases about them. Usually, though, the news information is usually put out by the company itself because it wants to lure in a new penny stock broker or investor who doesn’t know any better. These so-called press releases are given to businesses to make brokers believe they have some inside knowledge. The news in these press releases are usually verifiable; however it is not usually current information and will have already been factored into the penny stock.

An excellent way to determine if a press release is real or not is to find out if the release is widely available online. It is extremely improbable that several press releases would be found online all at once on businesses that do not have a huge following. You can also find out if a press release is real or not by contacting the investor services division and ask questions about the release. Most likely, the investor services division will not know anything about the press release since it will have originated from the marketing division, who is responsible for this kind of news.

If the press release is on a small business, you can probably get some beneficial information in an industry publication. If there is an article talking about some new technological advance, you will learn more about the business than just money. The publication is probably not going to be biased about penny stocks because it has nothing invested. It is only concerned with the technological advance.

You need to understand, though, that sometimes even the most reliable publications have been duped by these fake press releases as well, or they use them to simply take up space in the magazine or on the website. If the information is later shown to be wrong, they will print a correction; however, this will not benefit you if you have already taken the information and run. Even with these pitfalls, those of you who want to get started in the penny stock trades, you will want to visit the more upstanding Internet-based sources which can get you started on the right track as a penny stock investor.