What Is A Micro-Cap Stock?
The term ‘Micro-cap Stock’ is used to refer to stocks that have a market capitalization of roughly $300 million or less. Micro-cap stocks generally sell at, or less than, five dollars, and usually trade in what is referred to as the Over-the-Counter (OTC) market, which would include the OTC Bulletin Board and the Pink Sheets.
btw: Micro-cap Stocks are also referred to as Penny Stocks. Do not be discouraged by the words penny stocks. We love companies that are growing with in disruptive industries with great management teams and vision. We highlight these stocks in front of investors, and hopefully the stock that was worth a penny could soon be worth dollars.
How Are Micro-Cap Stocks Different From Other Stocks?
Other than the marketcap capitalization size, the biggest differences between micro-cap stocks and other stocks relate to a lack of public information, listing requirements and investment risk.
Most micro-cap Stocks do not have the same reporting requirements with the SEC. Companies on the Pink Sheets, for example, do not have to meet any minimum listing requirements, whereas companies that trade their stocks on major exchanges have requirements relating to total assets, minimum net assets, a minimum number of shareholders and total market capitalization.
Micro-cap Stock investments tend to be high risk because the companies tend to be new and have little or no proven track record.
Are Micro-Cap Stock Investments Risky?
Yes, all stock investments are risky! Especially micro-cap stocks or any other company with little or no operating history, but this also allows for explosive growth potential.
How Do I Get Information About Micro-Cap Stock Companies?
You can get trading information, the number of outstanding shares, market cap size, EPS, exchange information, L2s, charts, news, company info, financials, filings and more by entering a symbol in the company search. The company search is accessible from the icon. You can also find information on the Pink Sheets website or contact the company directly.
To view financial reports and corporate filings filed with the Security Exchange Commission (SEC), you should visit the EDGAR website. If you cannot find the company on EDGAR or get information from the company, you can contact your state securities regulator, which should give you access to the most recent reports that the company has filed with its regulators.
What Is EDGAR?
EDGAR, or the Electronic Data Gathering and Retrieval system of the SEC, allows companies to both file their own financial reports and access the corporate filings of other companies. The EDGAR system can be accessed from the Security Exchange Commission’s (SEC) website.
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