Micro-Cap Company : Definition & a Brief Summary

Definition of Micro Cap Company

A Company with Micro Cap Stock is known as a Micro Cap Company.

What is a Micro Cap Stock?

The Micro Cap Stock is the stock of a company with market capitalization in the range of $50 million to $250 million.

(This is an approximate figure as noted in the U.S. Securities and Exchange Commission website.)

Other Characteristics
  • Most of the Micro Cap Company’s stocks are generally traded "Over-the-counter" (OTC) market.
  • The daily trading volumes are not so large and mostly go pretty low on the long run too.
  • The pricing of the micro-cap stocks are also low in general.
  • These companies are mostly new to the market with limited or no operations and assets. Their revenues are also low with some of their products still under development stage.
  • Generally the investments in the stocks of micro cap companies are considered risky.
  • The requirements for listing in securities exchange is liberal compared to others.

Examples of Micro-Cap Companies

  • Quotient Limited - market cap $213.94mn 
  • Sequenom, Inc. - market cap $184.74mn
  • American Independence Corp. - market cap $151.33mn
  • ASB Bancorp, Inc. - market cap $109.03mn
  • Radio One, Inc. - market cap $76.83mn

Source: nasdaq.com (data as on 14th March 2016)

Related Posts:
  • Mega Cap Company
  • Large Cap Company
  • Mid Cap Company
  • Small Cap Company
  • Nano Cap Company