Definitions for "Penny Share"
a penny share is one with a very low price. Taken colloquially, this ought to mean only those with prices under 10p, for instance, in the UK, but that does rather restrict the investor's field, and by common consent penny shares are allowed to have prices up to about 60p, with the proviso that the total value of the company is under £40 million. There are two main attractions of these situations. The first and most obvious is that because prices are low, changes in the price of just a few pence can have a large impact in percentage terms on their value. Secondly, penny shares are often struggling companies which investors hope can be rescued, either by their own management or by new management. However, the low price may just mean the company is doing badly and may soon go bust.
Term applied to companies with a very small share price. The chances are that such shares have a high risk attached. Their apparent speculative appeal may, or may not be justified.
A penny share is a low value share in a company that doesn't have a significant operating history and has limited tangible assets. Companies that have real assets, such as equipment and inventory, and are engaged in some real business, such as manufacturing are not regarded as true penny share companies.