Thoughts on a Theme

 The theme - struggling stocks.  The thoughts - they're generally going to continue to struggle. The end.  No not really. I was thinking back to one of the ways that I got started and that was by nasdaq minimum price requirement notices during the pandemic. Then, it was a pretty straight forward idea. Stocks that were beaten down way more than they should have been or would have been because of the pandemic would bounce back and at least meet the 1 dollar requirement and often exceed it. But as things tend to go all good things come to an end. At least that's what I determined since it stopped working and I learned several other things about the market - like there are several ways to meet the requirement and one of those is actual to not give a fig about the requirement and just go to the OTC.  Let's see what are the other things that happen. One that actually meets the requirement is a reverse split. Well, I'd never heard of a reverse split before. It is just the opposite of a normal split and while a normal split is usually thought of as a good thing, a reverse split tends to be on the worse side. Usually the only stocks that do it are struggling in the first place. They may want to meet the requirement to stay listed or maybe they want to make their stock look more attractive to larger investors (from what I've learned, most large firms don't consider stocks under 5 dollars - this level can be quite pivotal) or they want to reduce the amount of shares available of the company. If you look back in time at some of these stocks that employ this method you tend to find a long history of reverse splits and see that the stock was once "worth" TEN THOUSAND DOLLARS! LOL! and now after reverse splitting 10+ times it is still only 20 cents.  That is a crumb dumb stock. Anyway it rarely triggers lasting interest. At the least, there may be a small pop right after the split but they tend to drift back to oblivion. Ok reverse stock splits - check - I'm sure there is a way to play these and have some strategy, but I honestly just stay away from them if I see that that's the kind of business that the board of the company is running.  Next, let's see, bankruptcy is an option. Some companies just give in and don't meet the requirement and go under. The other thing I mentioned was that they may just decide that trading on the nasdaq is not worth it and go to the OTC.  I always thought the OTC was just for penny stocks but it's not so. There are plenty of stocks the have decent businesses that trade on the OTC market. I learned that trading these though requires that you calculate in much larger fees, so I stopped trading them - and they usually lack liquidity (not enough trading going on). Anyway, I've experienced each of these first hand and learned the hard way about each. I guess I ought to mention that there are plenty of cases where the minimum requirement is met or at  least attempted to be met and can provide some fairly lucrative opportunities. While I usually steer clear from this kind of thing now it can be a trade especially if you have a stop and know your risk. Something that I thought was quite astute was that recently my brother took this kind of trade but it was coupled with some other good news (that the company was engaging in buybacks which usually pumps up a stock for a bit as supply will decrease - less supply, same or more demand = price increase). Anyway, good news with knowledge that a company needs to meet the requirement may increase the likelihood that there's a spike. There you go. Those are my thoughts on the theme. Cheers!