Dear Jason805,

I'm sorry to say but as far as I know, you're screwed. If the company has become a ghost on the pink sheets and, as you mentionned, is not even traded anymore (zero volume), you'll just never find a buyer for your shares. Remember: you can only sell it if someones accepts to buy it!

The worst part is you cannot even write off the loss at tax time. Since you technically still own the stock, and therefore only have a paper loss, you do not have an actual loss from selling!

This really sucks, and I know from experience that penny stocks are nothing but trouble for small individual investors like you and I. Between all-too-common pump and dump schemes, bogus filings and legitimate but weak startups going out of business every day, the only advice I can give you is: from now on, STAY AWAY FROM PENNY STOCKS!

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Hi again Jason805,

While chatting with my broker last week (I'm with Merrill Lynch) I recalled your Ask MCC question and here’s the strategy he recommends:

- You HAVE to sell your penny stock shares to take the tax write-off on your loss. No way around that…

- If the worthless security still has somewhat of a pulse (i.e. trading volume), you can either place a "limit" sale order on all the shares you have. The big advantage of a "limit" sale order is its 30-day validity, so you can just place it and forget about it for a month, hoping it gets executed in the meantime. Or you can place a "market" sale order every morning when the market opens. Such orders are executed in priority and are most likely to go through once a buyer shows up, but the downside is they are only valid for one day.

- If your selling attempts fail anyway, you can hope the security you are complaining about ends up getting labeled “worthless security”. In that case, the OTC (or Pink Sheets) will de-list it and the stock will disappear from your brokerage account. Then you can actually write-off the loss.

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