Stock Markets Exposed

New to stock market. What happened to my penny stock?

Hello, I really would like to understand what happened to my penny stock. I invested in NETSOL about 2 weeks ago and a few days ago It dropped about 50%. Im new and know I had no business putting $ into something that I didn't understand but would like to know what happened. NETSOL, if anyone can help me. Thanks in advance. Melissa

Public Comments

1. risky in these times.
2. It's been dropping like a rock for the last 6 months.
3. I checked the current quote and it is trading at $0.42 (NTWK, NSDQ). Penny stocks are inherently risky because large percentage gains are produced by a price change of only a few cents. For example, another 50% drop in NetSol would only require a drop of $0.21, a change many large companies can make in minutes. The market capitalization of NetSol is only 11 million, meaning the total outstanding value of shares (total shares * current prices) is very small compared to other companies. Its average volume is also only 111,000, meaning that's the average number of shares that exchange hands during a trading day. With such a low volume, trades do not happen very often. Thus, when they do, the price tends to jump more than it normally would on a larger, more well known stock. And, going back to the beginning of my answer, this larger jump in price creates an even larger percentage jump. If you are new to the stock market I would suggest investing in large corporations that you know, or in mutual funds that spread their investments over a wide range of stocks, lowering the risk.
4. O.K., I checked the Yahoo Finance section on NTWK, the symbol for NetSol Technologies. If this is the correct stock, the drop is related to the February 13, 2009 earnings release for the second Quarter of its fiscal year, with the earnings coming in at a loss of $0.08 per share for first 2 quarters compared to a gain of $0.14 per share through the second quarter of 2008. Closed up today .05 to $0.42. There seems to be software tied to the auto industry which would be a drag on earnings. I encourage you to read the quarterly report which should be or already has been mailed to you. Most of the so-called pros feel these penny stocks are not the best way to make your money work for you. But, the stock market has had an amazing collapse since August, 2008. Hope you follow your stock on a stock screen like Yahoo or one of your choice. Again, I think the stock is under the symbol of NTWK and has operations in Dubai, as well?
5. What happened is that :"Im new and know I had no business putting $ into something that I didn't understand". Now you know so don't let it happen again.
6. Penny stocks are extremely risky. I don't know what happened to your penny stock. Things like that happen. I recommend investing in some good stocks such as JNJ, PG, BNI, or some dow jones stocks.