Technical Traders and Shareholder Communications

By: Tom Allinder
April 21, 2008

I have spoken to a lot of people in the “business end” of the OTCBB and Pink Sheet Markets over the last few weeks regarding the state of the markets. Times are not easy for those of us that are in the business of helping companies in the market. Stock promotion is a necessary thing for many of the companies traded on the smaller exchanges. Call it what you will: “Awareness programs”, “getting your message out there” programs, “Exposure programs”; whatever you want to call them. Companies often engage investor relations firms and stock promotional entities to help them to gain liquidity and hopefully see an increase in stock price. Without exposure, these companies will not be able to raise money and grow in the marketplace. While there are a few rotten apples in any barrel, the vast majority of the companies traded on the OTCBB and Pink Sheets want to not just survive, but grow. The promotional entities want to see the same thing as well.

In today’s market though, it has become increasingly difficult for promoters and companies to have success getting the word out in the marketplace. Sometimes it seems as though no one out there is listening. The truth is, there are plenty of traders and investors out there listening; we just need to find out how to appeal to them more often. There are also other pools of investors in Europe, the Far East and many other places that trade OTCBB and Pink Sheet stocks. What can we do to put the message in front of them?


I can say this because I am a trader of OTCBB and Pink Sheet stocks. I am out there on the “battleground” of these markets on a daily basis. I read the posts on the message boards, I lurk in chat rooms and I have a number of good traders and knowledgeable people on my AOL and Yahoo! Instant Messenger lists. I also correspond with other traders and investors via email and phone. So, I have different perspectives on the market; one from the business side and one from the investor/trader side. I know what investors and traders are looking for and many times they are not getting it. But, if they get what they want, the stocks tend to perform well.

These different perspectives lead me to the conclusion that is very clear in my mind: Most of the traders and investors out there are intelligent and savvy. They are not inexperienced novices that are going to just buy anything that they see a promotional piece or news release on. Most of them use technical analysis before buying a stock. If the stock is weak technically, they will not buy it no matter how good the story is. One individual told me recently that this should not matter; he said “Warren Buffett buys stocks regardless of what the chart looks like”. Well, this may be true; but Warren Buffett has the money to buy enough of a stock to “fix the chart”.

I know at times I beat this to death but I will continue to do so: Companies need to communicate with their shareholders. A company’s shareholders can be their greatest asset. Happy shareholders tend to tell others about their investment. This is a very effective method for “getting the word out”. Informed shareholders that feel like they are part of the team with a publicly traded company will spread the word better than any other method.

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