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hundreds of stocks now trade below $1

David_Snowball
in Other Investing
The WSJ today reports that "557 stocks stocks listed on US exchanges were trading below $1 a share, up from fewer than a dozen in early 2021" (Alexander Osipovich, "Hundreds of NASDAQ stocks have fallen below $1," WSJ, 12/4/2023). Of those, 464 are NASDAQ stocks. A total of 583 NASDAQ stocks are listed as "non-compliant" with one listing requirement or another. One-sixth of NASDAQ stocks are at risk of being delisted. The article suggests that the SPAC boom in 2020 brought to market a bunch of stocks that should never have seen the light of day.

S. Ghon Rhee of the U of Hawaii notes that such stocks are "much more vulnerable to catastrophic losses" and that unwary investors "could have their entire investment wiped out."

Being de-listed means back to the speculative realm of penny stocks and pink sheets, a fate that those companies are struggling to avoid.

All of which is masked by the obsession with The Magnificent Seven.

For what interest it holds, David

Comments

  • yogibearbullyogibearbull
    edited December 2023
    They get a notice from the exchange to fix that in a few months and many do that just by reverse-splits.
  • David_Snowball
    Apparently the game can be stretched out, at least according to the article. Not my area of competence, really. I'm interested mostly because of the "house of cards" risk.
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