Not quite. Over-the-counter can refer to the OTCBB, which is different than the pink sheets:
OTC BB stocks are still required to maintain SEC filings. Pink sheet stocks are not. This is the reason some giant foreign companies trade on pink sheets in the US market - Nestles, for instance, as referenced in that article, and Volkswagen. They wish to be available to US investors without trading on a foreign exchange, but don’t wish to file with the SEC.
Hm, I wonder why Nestles’ doesn’t trade on the NYSE through ADRs (American Depository Receipts); this is one way to purchase foreign stocks (well, almost) but without the hassles of an overseas exchange.
As I said, they do not want to file with the SEC, which would be required to trade as an ADR on the NYSE. Presumably, if you wish to buy Nestles, you can examine their filings with the Swiss authorities, and purchase them on pink sheets.
Well to help answer the OP, I did check my brokerage website for the market movers on the OTC - they are hard to figure, because under current price it will list 0.00 - with a big percentage change and still under a penny.
I don’t understand - do good companies start out on the pink sheets or bulletin board and hope to “graduate” to the big boys, or are most of these companies once respectable, listed-on-a-major-exchange, but now having lost favor, doomed to die an ignoble death on the “rodney dangerfield” exchanges?
Both. Pink sheets are often the last stop before oblivion. At one time I held some “Triton Network Systems”, last seen as TNSIZ.PK (fiber may be good in your diet, but whether you want it in your portfolio is another question). Enron traded as ENRNQ.PK in its final death throes. Many of the pink sheet companies are woefully undercapitalized operations that are simply going to go nowhere. A better funded startup will stay pre-IPO until they make a public offering on the NASDAQ, or at least the OTC BB. The pink sheets sort of indicate that they can’t manage the accounting work to file with the SEC. There may be a few entities other than the giant foreign firms that have reasons for wanting to trade while not making their accounting public. I imagine there’s a few quite stable, but small, businesses in there that simply use the pinks to trade among a very small group of interested shareholders. The pink sheets are a crap shoot precisely because they aren’t required to disclose anything - you may be buying simply on the company’s word.