Among tens of thousands of penny stocks, only a few made it big, so let’s take a look at 15 most successful penny stocks in history.
While most of us hear the words “the broader market” or use it in conversations and investing, usually refer only to a small part of the stock market. Beneath a lot of more or less-known stocks are thousands if not tens of thousands of stocks little has been heard of. These are penny stocks. Penny stocks had been known as actual stocks trading for “pennies” or under $1 per share, but the SEC defines a penny stock as a security issued by a very small company that trades at under $5 per share. The majority of penny stocks are trading over the counter, usually on the OTC Bulletin Board, but there are many cheap stocks that are trading on major exchanges as well.
Penny stocks tend to stay under the radar because usually they don’t represent much interest to anyone. With the OTC market being unregulated, sometimes the information that these penny stocks disclosed can be misleading, and sometimes it can be false altogether, used to scam people from thousands of dollars. This is why investing in penny stocks is considered very risky, although the rewards can be equally high. As penny stocks are trading at very low price levels, even an insignificant increase in their price translates in double- or triple-digit percentage growth.
In rare instances, some news about certain penny stocks emerge, usually related to their spectacular growth. For example, in 2013, when Twitter Inc. (NYSE:TWTR) was preparing to go public, traders confused its ticker for the one of a bankrupt electronics retailer, which even had a similar name: Tweeter. The confusion led to a spike in trading of the said stock, which registered a volume of over 14 million shares and surged by more than 1,400% in one day. Another recent example was CYNK Technology, which was a company with no revenue and no assets, but somehow saw its stock jump from less than a dime to $20 at one point, before the trading was halted.
However, besides this dark side of the penny stock market, there are also many companies that eventually made it big. Many companies choose to list their stock even at low prices to get access to some capital and if the company succeeds, its stock eventually grows. However, such instances are pretty rare as companies that have great business models and good products have other options to secure funding without wandering into the volatile waters of the penny stock markets.
In addition to new and unknown companies that are trading on the penny stock market, there are some well-known companies, but whose stock price dropped due to some circumstances. These companies are sometimes called the “fallen angels”. They are worth some attention, because the developments that led to these stocks’ decline can be only temporary setbacks and the companies have the potential to rebound. The last financial crisis created many such companies, which eventually got back to the pre-crisis levels, or are still climbing.
Having said that, let’s take a closer look at 15 most successful penny stocks in history. Many of the stocks in the list were trading in the penny stock territory during the financial crisis. Sometimes, looking at the long-term chart of many large companies, it seems that the were penny stocks once, but it’s not true since the prices reflected on the charts are adjusted for multiple stock splits. We did not include such companies in the list.