What Are Penny Stocks?
Penny stocks are shares of companies trading for $5 or less. They are traded on all exchanges, including the NASDAQ and New York Stock Exchange. Many of the cheapest penny stocks trading for pennies or less are typically found on the Over-The-Counter or “OTC” exchange.
Who Invests In Penny Stocks?
Generally, anyone with a brokerage account can buy shares of companies whose stock trades for under $5 per share. The most active tend to be day traders and investors with an appetite for higher-risk investments. Since penny stocks are volatile and many are thinly traded with limited volume profiles, prices can shift at a moment’s notice. That shift isn’t usually a few percentage points. Stock prices can change by 50%, 100%, or even 1,000% within minutes or hours.
Some of the most popular penny stocks to buy lately include ones with lower floats. These tend to move erratically in very short periods and give way to extreme percentage changes. If you look at any of our articles discussing low float penny stocks, you’re sure to find some recent examples.
In this article, we’re not only answering the question “What are penny stocks,” we also look at a handful making significant moves in the stock market today.
Penny Stocks to Watch
Tellurian Inc. (TELL)
Energy stocks have been rebounding over the last few sessions following a significant sell-off in prices over the last few weeks. Tellurian and other liquified natural gas or “LNG” companies are following suit. Recessionary fears were to blame for the drop in oil and gas prices. Lower demand has put pressure on the sector. Meanwhile, Big Oil companies are reporting earnings beats.
TELL stock specifically has weathered this storm a bit better. Shares have held a mainly sideways trend for the last few weeks, with the 50-day moving average acting as a support level. This month’s earnings news seems to have brought some extra attention to the company’s stock.
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In it, resident and CEO Octávio Simões said, “Tellurian continues to add value through natural gas production and sales and the construction of Driftwood LNG. With our development contributions and taking into account the land sale and leaseback contemplated by our recent LOI, we have invested or received commitments for nearly $2 billion of the project costs, and we continue discussions with partners who want to join us in delivering much needed liquefied natural gas to the world.” Tellurian is focused on delivering long-term returns to shareholders, and this mindset sets the tone for commercial negotiations, bank debt arrangements, and equity investor discussions.”
Vuzix Corp. (VUZI)
This week Vuzix Corp. shares continued their recent uptrend. Following its latest update, gains extended by another 8% in the stock market today. Thanks to the rise of artificial intelligence and augmented reality technology, attention has centered around companies developing them.
Vuzix supplies Smart Glasses and augmented reality technology products. One of the recent catalysts that have continued to drive momentum is its latest order milestones. Specifically, the company announced a follow-on volume order for its smart glasses from Xpertinc, a Korean distributor. The order came shortly after it delivered a separate volume order to Tabbara Electronics to serve customers in the Middle East and North Africa.
Those who are following Vuzix this week could have Wednesday in their sights. It has nothing to do with upcoming CPI inflation data and everything to do with financials. Vuzix will host a conference call to discuss first-quarter results and give a business update this week. If VUZI stock is on your watch list, keep May 10th in mind. Management will begin the call at 4:30 pm ET.
LivePerson Inc. (LPSN)
Shares of LivePerson have slumped in March, falling from over $9 to as low as $3.57. Earnings were the main culprit for the drop in the price of the conversational AI stock. LivePerson posted revenue of $122.5 million and managed to reduce costs by over $80 million on an annualized basis. However, the market didn’t take the lower revenue and subsequent outlook favorably. Since that time, LPSN stock has gained the attention of a different group: those focused on penny stocks.
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There’s been jockeying going on by certain shareholders to push for new leadership. In particular, Starboard Value LP issued an open letter to shareholders emphasizing this point, among other topics. It believes that LivePerson needs new leadership to oversee a turnaround in the business model. The firm also said financial conditions have deteriorated under CEO LoCascio, based on a “severe lack of competent leadership.”
“We believe LivePerson’s poor financial and stock price performance are attributable to the company’s lack of operational discipline and a pattern of constant strategy shifts, as well as significant executive turnover (that unfortunately has not yet included the CEO), internal control issues that have resulted in a delayed 10-K filing in two of the last three years, and troubling allegations of inappropriate behavior and a toxic work environment,” Starboard said.
Shares of LPSN stock surged on Tuesday on the eve of LivePerson’s latest earnings report. It delivers first-quarter financial results after the close on May 9th, followed by a conference call hosted by CEO LoCascio and CFO John Collins.
List of Penny Stocks
- Tellurian Inc. (NYSEAMERICAN: TELL)
- Vuzix Corp. (NASDAQ: VUZI)
- LivePerson Inc. (NASDAQ: LPSN)