What Is a Micro Cap?
A micro cap is a publicly traded company with a market capitalization of less than $300 million. Micro caps are typically small, young companies that have yet to establish themselves in the stock market and may be more volatile than larger stocks. They often lack liquidity due to their smaller size and limited trading volume, making them riskier investments for investors.
Micro caps can offer attractive returns if they succeed in growing their business or expanding into new markets. However, these stocks also carry greater risks since there is no guarantee that the company will be successful or even remain solvent over time. Investors should research any potential micro cap investment thoroughly before investing as it could result in significant losses if not done properly.