The popularity of trading penny stocks has gone up in recent years but they still have a bad reputation due to many market manipulators. Despite their popularity there are still many misconceptions and myths circling them. Your only obligation to your money as an investor is to get educated on every aspect of the stocks you decide to buy.
The reason companies issue stocks because they need to raise money. Some companies do this in order to pay off a debt while others are newly founded or need funding to release a new product. Any kind of investment is risky because you never know all the factors that might influence the growth of a company.