effect of trying to obtain a large position in a penny stock company

[Euler09]

If you tried to buy in to a large position over a whole of a stock trading on low volume what would be the effect.

Would the liquidity go down? Would the short term spread increase last? At what point or percentage would you need to consider a tender offer? Is there any way of doing this without it being public knowledge? Etc

 

[Overnight]

If you tried to buy in to a large position over a whole of a stock trading at 25¢ what would be the effect.

Would the liquidity go down? Would the short term spread increase last? At what point or percentage would you need to consider a tender offer? Is there any way of doing this without it being public knowledge? Etc

I sense a finger-waggling incoming from liquid-hot Magna soon.

 

[Euler09]

I sense a finger-waggling incoming from liquid-hot Magna soon.

You can't talk about penny stock?

 

[Overnight]

You can't talk about penny stock?

Generally, no. Although I am not sure if that rule applies just to specifically-identified penny stock companies.

 

[ajacobson]

As others have mentioned - 13D reporting, but you can buy as much as you can afford. If it's thin it will be expensive to get in and harder to get out. Consider working with one of the MM/brokers that post markets in the name.

 

[Euler09]

As others have mentioned - 13D reporting, but you can buy as much as you can afford. If it's thin it will be expensive to get in and harder to get out. Consider working with one of the MM/brokers that post markets in the name.

Mm that post markets in the name? I know it will be expensive just wonder if a buyer buying up lots of volume over a whole year would make the spread wider and the stock price permanently higher

 

[ajacobson]

Depends on the name and the available float. Is this an actual interest or purely hypothetical. Call one of the MM/brokers and tell them what you have in mind - consider an account with them.

 

[supreme trader]

I guess you can call this as suicidual investment.

 

[Euler09]

I guess you can call this as suicidual investment.

Whatever you say supreme noob

 

[ironchef]

On thinly traded stocks or options, you will probably move the market. Been there done that.

You keep buying and the penny stock will keep going up. So on paper you are doing very well, making lots of money. One day you decide that you should take some profit, so you call your broker and tell him to sell some. His answer: Who am I going to sell them to? You are the only one buying.