Monday, August 29, 2011

A Note On Micro Cap Stocks And Micro Cap Companies

Micro cap companies and micro cap stocks are the riskiest place in the financial industry to place your investment, yet people place millions of dollars a year into small cap stocks and companies. this is not for the faint of heart, more over, one should not invest in micro cap stocks or micro cap companies unless you are well versed in the financial industry. Here at, our team has more then 15 years of combined experience and we still do not suggest micro cap investments to anyone unless they are so in-the-know, that they understand the HIGH level of risk associated with purchasing micro cap stock. Please read our disclaimer.

Micro cap stocks are extremely volatile and anyone who invests in these companies sees their investment fluctuate more then any other investment in the securities industry. An example is a company with a stock price under $1, if this company's stock price rises just ten cents, that is a ten percent increase, therefore giving $100 dollars profit for anyone who invested $1000. This also means that is the stock loses 10 cents, the investor now has stock that is worth $900, taking a loss of $100. these fluctuations are independent of the trading fee, which is between $7-$20 depending on what brokerage or trading house you are trading with.

Please note; Many micro cap companies went public because the lack of capital, and their view was that "going public" will allow for easier ways to attain capital, in other words they were putting their financial puzzle together when they decided to sell their company stock. This means that no sale of their company stock, or not raising enough may lead a micro cap company to be in a worse off position than if it were private; taking into account stock exchange fees, lawyers, and disclosure for the safety of investors mandated by the S.E.C.

So why invest in these extremely risky stocks? Well we suggest that you don't, and leave this type of investment to a professional. If you are going to try your hand at placing some money in a micro cap company or micro cap stock, the analysis for which ones to buy is not that much different than buying any other stock. Check to see if they are profitable, read their financial, and special agreements. Most micro cap stocks ro micro cap companies trade over the counter at OTCBB or OTCMARKETS, on these exchange counter websites, the company's listed need to provide some sort of disclosure, look through these websites (where the company is listed) along with the S.E.C. filings, and always - always spend only money that you can afford to lose. A 25 million dollar market cap company may sound like a big company, but according to Wall Street standards, it is not. These companies have been known to disappear on one bad trading day. As always, don't let your homework end here, read , research, and learn as much as you can before you invest in any stock, especially MICRO CAP STOCKS!



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About the Author: Nicholas Coriano is a Business Consultant and Planning Guru.  He is a graduate of The University of Connecticut Business School and the John Marshall Law School in Chicago.  He has worked at Merrill Lynch, The New York Stock Exchange and as an Investor Relations Agent & Consultant to Micro Cap Companies and Penny Stocks.  He is the founder and author of The a blog focused on providing information and advice to Micro Cap Company Executives and Investors.  You can also find him blogging about Social Media, SEO, Web Development and Tech on

About MicroCapCompany.COM: MicroCapCompany.COM (The Blog) is a blog focused on providing articles, news and information on the micro cap sector and start-ups.  The Blog is a free service offered by Cervitude™ Investor Relations (a micro cap investor relations firm) and offers compensated research reports and business plan writing services for micro cap companies and penny stocks.  If there is a particular topic you would like to see covered on The Blog, email, If you would like to advertise on The Blog, click here

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