What Does .Pk Mean After a Stock Symbol?
The .PK after a stock symbol indicates the stock is a "pink sheet" stock. The term pink sheets is a leftover from the days before stock prices were available from electronic sources. Stock quotes for the most speculative stocks were printed on pink paper. An investor interested in a pink sheet stock would go to his local broker and look for the pink pieces of paper on the front desk.
Identification
Pink sheet stocks--those quoted with a .PK--trade in the over-the-counter (OTC) market. OTC stocks are those that are not listed on the major stocks exchanges such as the New York Stock Exchange or NASDAQ. There is a separate electronic quotation service for pink sheet stocks. According to the OTC Markets website, the pink sheets is the third most speculative tier of the OTC stock markets.
Significance
Pink sheets stocks are from companies that do not have to meet any listing or financial reporting requirements. The higher tiers of the OTC stock market, the OTCQX and OTCQB, require companies to meet minimum reporting and registration requirements. If a stock is a pink sheet company, it is not registered with the U.S. Securities and Exchange Commission (SEC).
Function
The market in pink sheet stocks is maintained by brokers who act as market makers for specific stocks. A market maker is willing to buy or sell the specific pink sheet issue at the quoted bid or ask prices. Over the counter stocks, including pink sheet stocks, will be quoted with a bid price, what buyer has indicated he will pay and a ask price, what a seller will accept to sell the stock. The difference between the prices is called the bid/ask spread.
Considerations
An investor who is interested in buying a pink sheet stock should contact her broker to check on the availability of shares. An online, discount stock broker may not be able to fill an order for a .Pk stock through the broker's online trading system. Before placing an order for a pink sheet stock, the investor should look at the bid/ask spread and the average trading volume of the stock. An order placed for a different limit price, or large number of shares, may take a long time to be filled.
Warning
Pink sheet stocks are the most speculative stocks available in the U.S. Stocks listed in the pink sheets can be used to scam investors out of their money by unscrupulous brokers. The SEC notes that there is very little or no unbiased information available on these companies.
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