Rumor and speculation…

Penny stocks are that much more susceptible to rumor because of their small market valuation. Prices can often shift significantly when only a small handful of stocks have been traded.
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When a company share doesn’t have (much) liquidity, two problems occur:-

Firstly, there is always the possibility that having bought the stock, there simply isn’t anyone who wants to buy it off you. If liquidity is low, and you can’t find a buyer, then clearly the classic market rule of supply and demand will apply - and you’ll have t drip the price until finally someone does find it attractive enough to take a punt.
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