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Most penny stocks are fraud -- especially the "pinks", or bulletin board stocks. They're manipulated from start to finish, and very very few actually work...which isn't to say people don't make money.
Liquidity is another huge factor most don't talk about -- or know. A stock is only as liquid as the market makers allow it to be, and penny stocks are really susceptible to ill-liquidity.
For example, a stock might have a $26 bid, but it's only good for 500 or 1000 shares...I've literally seen bid prices bottom out with block sells.
The only real advice anyone should give/receive with these stocks: invest what you can afford to lose.
And don't believe the hype. Even when they whisper it to you over the phone. lol
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