Boca Raton,FL July 11,2010 Penny Stock Traders have been busy lately as Big Board NYSE stocks (OTC: BLOKA) , Blockbuster, (OTCBB: FNMA), Fannie Mae (OTCBB: FMCC) Freddie Mac have become fallen angels.
These 3 companies could not have picked a better time to enter the over-the-counter market. With small-cap stocks in the summer doldrums, traders and investors have been complaining about how slow it’s been the last couple weeks. Since being delisted, Blockbuster, Fannie Mae, and Freddie Mac have been top volume leaders in the over-the-counter market. All of a sudden traders have something to talk about again. These 3 stocks seem to be providing some nice liquidity for day traders and investors.
TSW was expecting Fannie and Freddie to come down to the .05 to .10 cent range before jumping in and catching a big rally. With over 5 billion shares outstanding, we are still hoping for a drop.
Small-caps with this kind of share structure usually trade as Sub-Penny stocks. In the long run it’ll be interesting to see where these stocks end up. Given the current state of the economy, there seems to be a lot of unanswered questions surrounding the fate of Blockbuster, Fannie, and Freddie and whether or not they can survive in the long run. If the housing market rebounds, will Fannie and Freddie make a real true comeback? Will the once dominating Blockbuster continue to get eaten up by the likes of Video On Demand, Netflix, and grocery store vendors? If these 3 once dominating companies remain at these levels, do they reverse split and go back to the big boards? For the time being, TSW feels that these stocks are news driven and will continue to be tremendous trading vehicles because of the liquidity they provide.
If you’re new to trading penny stocks, finding delisted stocks from the bigger boards is a strategy that can be very profitable in the short term. A big winner for penny stock traders this year was Washington Mutual (OTC: WAMUQ). This was another fallen angel from the mortgage loan crisis that provided a very nice opportunity to make money in small-cap land. Will traders and investors continue to see this same type of action in BLOKA, FNMA, and FMCC? Don’t forget, tough times usually present penny stock traders with opportunities to make big money.
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