Questions to Ask Investor Relations Reps at the Companies
Before you invest in any penny stock, call the investor relations contact at the company. In addition to ascertaining the legitimacy of the stock, you will get a much clearer picture of their overall situation.
To get the most out of your brief call, you need to ask the right kinds of questions, such as the following:
How large is the potential market for your product? Of that, what is your company’s market share?
How many employees do you have? How does that compare to three years ago?
Who are your biggest competitors? What would they say about your product?
How many of your employees have been with the company for less than two years? What is your employee turnover rate?
Where did the CEO work before joining this company? For how long? Why did she leave that position for this one?
Where do you see this company in a year? Three years?
What are the primary sales drivers for this company?
What are the biggest risks and threats to the company?
What percentage of customers stop using your product? Why do they stop using it?
How much more money will you need to raise to keep operations going?
What is the company’s growth rate in terms of sales? How does this compare to the industry average?