facebookI'm curious, if a company isn't listed on an exchange, then how do they issue stocks OTC if there is no present value for them, like the SGX? How do they value these stocks then? - Seedly

Anonymous

19 Jan 2020

βˆ™

General Investing

I'm curious, if a company isn't listed on an exchange, then how do they issue stocks OTC if there is no present value for them, like the SGX? How do they value these stocks then?

E.g pennystocks we see on Wolf of Wallstreet

Discussion (5)

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They lacked infomation and are very thinly traded. They have high spreads and they are just tempting investors to bet on their potential upside. They just need to fill out a form requesting to be listed in the OTC exchange so it is hard for investor to collect any informed information/decision before investing.

Bjorn Ng

15 Jan 2020

Business Analyst at 10x Capital

It's simply based on supply & demand. And usually these OTC stocks have super low liquidity - which means in the case you want to sell, you might have problems doing so. OTC markets are kinda considered a risk because you will never know what will happen to the company. However, there are actually gems inside - take a look at Hemacare. Was in OTC, and now getting acquired!

Yes the stock price is based on demand/supply for OTC method. Its just that it is not publicily show...

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