How a company turns into penny stock.

HOW A COMPANY TURNS PENNY STOCK
🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️
Reason:
-Corporate governance means best business practices
How to define

Recently we have heard About Shilpi cable
Company didnt disclose why insolvency petition filed?
Why they removed key management?
Why they want bonus issue when already so much problems?
How company sales increases drastically as well as debtor also.
And many more issues.

This is called bad governance.
🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️
-Promoters mismanagement
Example:
Satyam computer
Financial tech
Treehouse
Amtek Auto
-Technology Change
One of The main Factor is also technology upgradation
🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️
-Increasing Debt and misallocation of that debt Conversion of Debt into Equity
Example-Guj Nre Koke
🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️
-Misjudging of Competitor Strategy
Suppose Two companies operating in Same ind and one is using Latest Technology and other Obsolete technology
then Second One loose thier business compared to First.

Rcom, Idea
🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️
-Resignation Of KMP
Intellectual Property Is also an important part of Company.
Certain change in Directorship can destroy any company.
🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️🗯️
-Lack of Code of Conduct
Eample-SRS
-Insider Trading(Syncom Formula)
-Sustainanility Issue

Author: Atul Singh Stock Market Analyst

Disclaimer: This Blog, its owner, creator / contributor is not a research analyst and expressing opinion only as an individual investor in Indian equities. He/She is not responsible for any loss arising out of any information, post or opinion appearing on this blog. Investors are advised to consult financial consultant before acting on any such information. All information in this blog is posted for personal study, All information posted on blog is as available in public domain.

2 thoughts on “How a company turns into penny stock.”

Leave a Reply

Your email address will not be published. Required fields are marked *