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Definition of the Week: Pink Sheets

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Pink Sheets

This is a daily publication released by the National Quotation Bureau of over-the-counter stocks. It is important to note that companies that trade on the Pink Sheets are not bound by any listing standards. Companies listing in this marketplace don’t even have to make any of their financial statements public. While most stocks that trade on the Pink Sheets are small, there are some large foreign companies (such as Nestle) that trade on the Pink Sheets.

stockbrokers.com Explains Pink Sheets:

The Pink Sheets got their name because these quotes were actually printed on pink paper. Many people use OTCBB and Pink Sheets interchangeably, but there are some key differences. The single biggest difference is that the OTCBB is regulated and administered by FINRA, while Pink Sheets is a completely independent marketplace. Investors need to realize that because there are no rules or regulation surrounding Pink Sheets, investments in this marketplace are extremely risky. Price manipulation occurs frequently in stocks in this area.

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