The OTC Markets Represent Financial Empowerment By Virtue Of Being Wall Street Adjacent
The rich are still getting richer through the stock market, while the 99% can’t, and likely won’t break in anytime soon — not in any meaningful way, at least. For many Americans, it makes more sense to build a raft and navigate the choppy waters of the Over-the-Counter markets (OTC markets), where there’s added flexibility and opportunity. I’ve called these markets a cruel and unusual bazaar on many occasions. Be under no illusion that they might be a quick and simple route to wealth; no such thing exists. However, the OTC markets are somewhat independent from traditional Wall Street; which oddly makes them relatively steady in comparison, plus they offer more financial prospects for non-millionaires and everyday investors.
OTC markets ≠ stock market
The OTC markets are kind of like a scrappy younger sibling who struggles to form an identity independent from the older kids. Being from the same family, at first glance, they may appear quite similar, but upon further inspection, they’re rather different. Unlike Wall Street’s stocks, OTC stocks are decentralized and therefore not listed on the big boards. This distinction contributes to the (typically) smaller administration fee, ability to customize deals to fit specific needs and an overall spending flexibility; which tends to better serve the unique needs of everyday people.
OTC markets are also home to companies valued at $300M or less. Generally referred to as a micro-cap stock (nano-cap if market cap is less than $50M), these companies are typically accessible to everyday people because they are mostly affordable. Many micro-cap stocks can be picked up for just pennies — thus the common term “penny stocks.” Trading ranges from dollars to cents. But don’t let the term fool you; penny stocks are heavily traded on the OTC markets. Penny stocks also trade in good company, as they share the market space with sizeable firms too. Just take a look at the OTC Market Group’s current market (active list) and you might be surprised to find names like LVMH Moet Hennessy Louis Vuitton, Burberry Group Plc and even Fannie Mae.
OTC market companies present powerful opportunities for investors, affording them the ability to own public equity in early stage companies which could become the next “unicorn”, so to speak. In a market space that has arguably created more residual wealth for the 99% than most of the traditional public markets ever have, it’s here, that very often entrepreneurs find it possible to receive the necessary funding to propel their business forward. And in a surprisingly positive plot twist for 2020, there is a push to see access to the public markets widen with the possible expansion of the accredited investor definition along with petitions to raise the regulation crowdfunding ceiling to $20 million. These efforts should both further assist small businesses and put more people in the game, turning everyday folks into real investors.
The few and the mighty
The corporate welfare that’s poorly masquerading as ‘capitalism’ right now on Wall Street doesn’t reflect reality in 2020. At least not most people’s reality. The pandemic has decimated Main Street and federal bailouts have heavily favored massive corporations when small businesses actually account for 99.7% of all employers in the US. This shortsighted and reckless decision will be felt the hardest by everyday people because for each dollar spent at a small business, 67% of it stays in the local community. It’s evident that the backwards nature inherent to the stock market serves only the financial elite. One of the best features of the OTC markets is that in current day, it’s principally independent from traditional Wall Street — ergo, egalitarian.
The flexibility enjoyed by the OTC markets offers the advantage of agility, which allows this marketplace to better serve the financial needs of the 99%. This freedom enables OTC companies to remain largely unaffected by the carnage on Wall Street; each day of volatility seems to strengthen the value and place of the OTC markets (microcap, nano cap and penny stocks included) within the financial markets’ ecosystem.
As someone born and raised poor and disenfranchised, my career in the OTC market space significantly impacted my life, which in turn inspires me to help people find ‘their way out’ by responsibly leveraging the micro-cap marketplace. Again I reiterate — it’s certainly not ‘easy street’, but aside from equity crowdfunding, it’s a practical avenue which intersects with Main Street, and that is without question, the 99%’s most accessible road to establishing financial wealth and equality from the public markets. The OTC markets, despite being a ‘cruel and unusual bazaar,’ are the only public markets truly working to empower the people.