PINKSHEET INVESTMENT
Since January 2013, the Ghanaian media continue to publish issues about the December 2012 Elections which led to the so- called Election Petition which is ongoing. During the petition hearing legal terms such as affidavit, pleadings, petitioners, respondent, joinder of parties,witness, counsel, amicus curae,further and better particulars and interrogatories as well as directions. The only one that may remain on the lips of many Ghanaians is not " you and I were not there " but THE PINKSHEET. It is my intention to inform my facebook friends that the pinksheet is perhaps commonly used in the investment environment long before its adoption by the electoral system in Ghana. Just as Blue Chip companies exist expressing their profound and first class performance as reflected in share prices, good management strategy and forward looking product and service innovation. Generally there are large over the counter markets such as the Nasdaq and regulated markets such as the Stock Exchanges. When companies are unwilling to be listed on the exchanges because they do not want to follow rigid legal requirements and ensure good corporate governance, they trade their stocks but they are reported on a pinksheet. Investment in such companies can be termed pinksheet investment.
It is important to note that in some cases pinksheet firms were once delisted from a recognised Stock Exchange or do not want to trade on a well organised over the counter market. It may also mean that the company is in distress and can not find space in a regulated market. The Pinksheet firm may also be a small company that may not qualify to be listed on an exchange and possibly on an alternative investment market. What an investor should know is that pinksheet firms may be exposed to price manipulation and can be risky to invest in. These firms also lack analysts following because relevant data about their performance is not readily available since they are not required to publish them. Many Multinationals penetrate international markets such as the US securities market through the pinksheet. In the face of high demand for disclosures and accountability at the corporate level, there is unregulated pressure on such firms to publish their reports by investors to make investment more protected based on reliable information.Just like many questions and demands on the pinksheet at the supreme court, investor demands on pinksheet firms will deepen investor confidence.

 COURTESY: MR JOHN GATSI