Day in and day out, CEO’s of early development stage private companies get sold the dream of grandiose opportunity within in the penny stock market. Unfortunately, the majority of the time however, they find themselves being victimized by an immoral and unsavory enemy. The worse part…, this foe, the challenger of their success, is actually none other than one of the primary groups, entrusted to bring them to the promise land.
Who is this enemy?
Well first…, let’s talk about early development stage company CEOs.
There seems to be two types of CEOs which find themselves operating within the OTC Markets. “The Honorable” CEO, who in fact means to accomplish something noteworthy; caring less about leveraging the public stock for their own personal gain. Then you have “The Dishonorable” CEO, who sees an opportunity to exploit the penny stock market and the Issuer’s shareholders; turning the company’s public stock into their own personal ATM.
Please, focus on the former if you will.
The Honorable CEO enters the market with a meaningful and honest plan. Usually, one provided to them, or partly developed by their lead penny stock investor. But then, without warning… without care or remorse, the CEO gets punched in the face by a penny stock investor.
What happens when the CEO gets punched in the face by a penny stock investor? The same as any prize fighter who got punched in the face by Mike Tyson – back in Iron Mike’s prime. Their entire plan, along with their “Title” ambitions, goes down for the count.
Time and time again, CEO’s who want nothing more than to build a real business, look to the public markets as a vehicle to responsibly accelerate growth. They usually are sold on the seamless process of becoming a public entity through reverse mergers into shells, micro-cap acquisitions and shelf registrations. They are often given the promise of capital injections through certain SEC (U.S. Securities and Exchange Commission) exemptions, such as Reg. A [recently adopted new Rules Expanding Reg. A] Reg. D – 504 and Reg. S. They were also likely told that there would be a long line of penny stock investors that would be overjoyed to provide funding through new, long term debt instruments.
So, these CEOs strategize with penny stock investors [generally the usual suspects], to move their company to the next level. They hope to join the ranks of those before them that once prospered on OTC Pink Sheet or Bulletin Board markets. Then BAM! Holy crap Batman… The CEO gets punched in the face by a penny stock investor.
Iron Mike Tyson, who may easily prove to be the world’s greatest philosopher of all times, once said, “Everyone has a plan until they get punched in the face.” You may laugh, but isn’t it true?
What’s disappointing here, is that when this CEO gets punched in the face by a penny stock investor, so does every single mom & pop, ‘little-guy’ shareholder, who buys a company’s stock at ten cents ($0.10), only to find it at five cents ($0.05) by the close of the next trading day. Adding insult to injury, nano-cap and micro-cap shareholders immediately tend to only blame who and what appears to be the obvious culprit, the CEO! Sadly, in this particular case, The Honorable type.
The dramatic tragedy here, is not simply that the CEO gets punched in the face by a penny stock investor. The tragedy becomes, all that this CEO once loved and held dear… spent their lives or careers developing, suddenly becomes shrouded in burial garb. Their integrity goes on the stand for public mockery and degradation; their character, assassinated on dubious investor message boards. This isn’t what they signed up for, nor what the penny stock investor sold them on.
If shareholders cannot understand the plight of an early development stage company, or more importantly, The Honorable CEO’s naïve and unsophisticated notion of genuine opportunity that the OTC markets [not intended to mean the actual corporation] supposedly promised, then what poignancy is truly had by any shareholder, when that Honorable CEO gets punched in the face by a penny stock investor?
None! Because the majority of micro-cap shareholders, too, may be equally as naïve and absorbed in the unsophisticated notion that the OTC markets promises them genuine opportunity as well.
AJENE WATSON, LLC is a witness to this chaos on a daily basis. Wiping tears and mending wounds of the naïve and unsophisticated, who initially bask in the sunny notion that there is actually a leveled playing field. The idea that early development stage companies and nano-cap/micro-cap shareholders, together, can prosper.
Yes… they can; but only should they, together, invoke change.
There must come a point where shareholders of early development stage public companies, and those few Honorable CEO’s, find a way to combat the vile nature of those usual suspect penny stock investors, who continuously victimize the entire market place. This is not to suggest that getting punched in the face and having to rethink a game plan isn’t par for the course… it’s expected in life and in business. It is just not expected to be delivered as a “Sucker Punch” from the Person(s) who is supposed to be your friend and supporter.
Do not allow the company you support to get sucker punched… you could be the next to meet a fist!