“Pink sheets” is an outdated term for stocks that trade over-the-counter (OTC) rather than on a public stock exchange in the U.S. These companies either cannot meet the requirements for listing on an exchange like the New York Stock Exchange (NYSE) or prefer to trade over the counter.
Some pink sheet companies are too small to qualify for an exchange while others prefer to avoid the costs and complications of the required filings with the Securities and Exchange Commission (SEC). Some foreign companies list on their home exchanges but opt to sell OTC in the U.S.
Most pink sheet stocks are highly speculative, although their notorious lack of regulation has been corrected to some extent in recent years. They also go by different names. Pink sheets were officially renamed Pink OTC Markets in 2008 and then OTC Markets Group in 2011. The colloquial term is still widely used and is still referenced in one of the three OTC markets,…
