So-called penny stocks can’t be bought or sold for pennies any more. They can be priced for a few dollars a share. By definition, they are any very low-priced shares of small companies sold in limited markets. Share values are often doubtful at best.
Their managements’ or promoters issue large numbers of shares, where pricing is low, but where values are often minimal, if they exist at all. What’s more, they control their issues market movements.
Yet, those who ought to know better still buy them. They think something priced low has to be a bargain. That assumption provides the best way to get fleeced. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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