Par Value Related Question

[BR08]

RE: Par value (stock) - An arbitrary dollar value that a company assigns to its shares. Par value has no economic significance. The legal significance of par value is, roughly, that if shares are issued below par value, the holders of those shares might be assessed the difference between par value and the issue price. Most stock certificates state that the shares are fully paid and nonassessable to indicate that holders are not on the hook for additional contributions because the shares were issued at a price greater than par value. Companies usually assign a very low par value to common stock.

I am planning to buy some penny stock which is listed on Pink sheet, however there is something I am not very sure. According to above statement, if I buy 500,000 for example AA stock at $0.01 which is below the par, am I liable for the difference between par value and the issue price? Could you please help me with this question?

[Stocktrading101]

No you are not liable. Not sure what the user was saying in that explanation either. Buying a penny stock is like buying any other stocks, just that its shares are much less expense. Note that there is a reason why any stock trades for pennies, and the probability for bankruptcy is typically fairly significant.

Good luck!

[Pearlpam]

Par value is usually a very small amount that bears no relationship to its market price, except for preferred stock, in which case par value is used to calculate dividend payments. For a debt security, par value is the amount repaid to the investor when the bond matures.In the secondary market, a bond's price fluctuates with interest rates. If interest rates are higher than the coupon rate on a bond, the bond will be sold below par value.If interest rates have fallen, the price will be sold above par value. also called face value or par.