Pink Sheets: The Transparency Factor is Getting Attention…

By: Tom Allinder
May 19, 2008

All of a sudden now, Pink Sheet companies are going to great lengths to make sure that their status at PinkSheets.com is up to date. This is especially true of companies that are looking to start trading, raise money or put out significant news. It makes no sense to do something great and have a skull and crossbones, stop sign, or yield sign at PinkSheets.com. Company management and their attorneys have realized that it’s a tough market out there and details make a difference. Investors ARE looking at filings and such before buying stock. The old days of just hanging something out there is no longer good enough. Those companies that figure they can go about their business and not update their status at PinkSheets.com will continue to trade very little.

No More “Anything Goes”:


In the early 2000s, the OTCBB and Pink Sheets were separated. Essentially those companies that could not “afford” to do their filings (it is expensive) were relegated off to the Pink Sheets. Recently though, the old days of “anything goes” on the Pink Sheets is finally coming to an end. Companies must file information such as quarterly filings in order to have a good “status” on the Pink Sheets.

Up to Date Filings Indicates Strength

The bottom line is that it costs money to get filings done by accountants and attorneys. It also requires follow up to make sure those filings are posted. A company that has accomplished these objectives is an indication of strength and seriousness about their place in the market. Some of the companies “listed” on the Pink Sheets are flat broke and do not have the money or resources to accomplish anything. So, a check of status indicates where a company is with regard to their business as a whole.

The Writing is on The Wall

Given what I have said, it seems that it is validating what I have thought for more than a year now. Companies must take the lead with regard to the condition of the market. This means ensuring that their information is readily accessible by prospective investors. The next thing companies can do is to make sure to keep their investors informed. Secondary to informing their shareholders on a regular basis is to reach as many people as they can that invest in the market. Companies can reach many people just by putting out informative and to-the-point news releases on a regular basis. What is a regular basis? Once a week is my answer to that question. More than once a week makes a company sound shrill. Less than once a week leads to questions regarding the health of the company. The writing is on the wall: Keep filings up to date because people do look; and, keep shareholders informed. Investors today are a lot smarter and much more resourceful than they were just a year ago…

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