Monday, August 27, 2012

OTC Markets Data Shows Increases in Credible Companies; Decreases in Some Questionable Securities

For the last couple of years, we've reported some of the trading statistics released by the OTC Markets.  Today, they released their latest numbers.

According to their data, the number of transparent, credible companies seems to be growing while the number of “dark” firms (i.e., those that do not provide much [or timely] information) appears to be shrinking.  We compared the numbers from 2009, 2010, 2011 and the numbers as of July 2012.  The OTC Markets have several tiers:

OTCQX - the highest tier for companies that go through a rigorous review and meet certain financial standards.  This group has more than tripled in size since 2009:
2009:     78 companies
2010:    159
2011:  246
July 2012:  385  

OTCQB - for companies that are "reporting" to the SEC or a banking regulator and are current in their reporting requirements. This group (with the 2009 numbers combined between the OTCBB on Pink Quote and the OTCBB only) has seen small decreases, year-to-year, since 2010:
2009:  3,390
2010:  3,851
2011: 3,716
July 2012:  3,510

The decreases could be due to a number of reasons – for example, companies could have voluntarily decided to move to the pink sheets (to save money) or they could have been forced to do so due to failures in their reporting obligations, or they may have been promoted to a higher exchange, either within the OTC Markets, or to NASDAQ or one of the other exchanges.

OTC Pink Current Information - for companies that follow certain standards and make certain information available through the OTC Market's news and disclosure service. This group has risen steadily since 2009:
2009:   1,695
2010:  1,830
2011:  2,043
July 2012:  2,353

OTC Pink Limited Information - for companies that may or may not be troubled, but have not been current in reporting through the OTC Market's news and disclosure service. This group has seen decreases in two consecutive years: 
2009:  739
2010:  749
2011: 723
July 2012:  645

OTC Pink No Information - which includes "defunct companies that have ceased operations as well as 'dark' companies with questionable management and market disclosure practices." This group saw a sharp rise between 2009 and 2010, but has decreased substantially (by over 10%) over the last year:    
2009:  2,445
2010:  3,375
2011: 3,355
July 2012:  2,982

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