I have had many years of experience trading Small and Microcap Stocks..and have learned a lot (payed “tuition” many times over):
1. The people in charge are making 150k-300k/yr and will do anything, including complete negligence to the interest of share holders, to keep that.
2. The next big announcement is always right around the corner (the will spread rumors..that is, lie about it).
3. They will use pump and dump type IR to get the stock up so they can refinance, many times on a down round.
Common Characteristics
1. Little or no Barriers to entry
2. No moat (ie Intellectual Property)
3. Graveyard of similar stocks.
Reverse Mergers and Reverse Takeovers (commonly called “RTO’s”)