[Answer] What is necessary for a stock to be classified as a “penny stock”?

Step 1 : Introduction to the question "What is necessary for a stock to be classified as a “penny stock”?"

...Historically, penny stocks were traded for less than one dollar per share, which is where they got their name. Today, the SEC considers any stock that sells for under five dollars per share to be a penny stock. These companies are usually small, and are typically in a growth period and looking for funding money. They are inherently risky investments but can have sizable gains.

Step 2 : Answer to the question "What is necessary for a stock to be classified as a “penny stock”?"

Trades for less than $5 per share:

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