Even Tesla Can Be a Penny Stock with Fractional Shares

Penny stocks are stocks that trade below $5 a share. They're much riskier investments for a number of reasons, including the fact that most companies with such cheap shares are untested and make limited public information available.

Unfortunately, they used to be the only option for investors without big pocketbooks. That's because brokers charged commissions to buy stocks and limited you to buying full shares. Things have changed now though, and big-name companies such as Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL) are penny stocks now. And that's not because these two innovative industry leaders recently split their stocks -- even though the splits did lower the prices. 

Instead, it's because of something called fractional shares.  

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Source Fool.com