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What are small cap stocks?
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2nd Nov 2009 by Michael Haltman
The cap in small cap stocks refers to the capitalization of a company. There are tens of thousands of companies around of various size, but the capitalization of the company refers to the number of shares of stock the company has outstanding, multiplied by the price of the stock. Generally small cap is considered to be from $300MM to about $2B, compared to a big cap stock that is usually consider a cap of above $10B. Investment in these companies tends to be for those with a higher capacity for risk, as small cap companies tend to not be as stable or seasoned as large cap. This thinking was put under a severe test during this years market meltdown, as many large cap stocks became small cap or even went out of business.
The cap in small cap stocks refers to the capitalization of a company. There are tens of thousands of companies around of various size, but the capitalization of the company refers to the number of shares of stock the company has outstanding, multiplied by the price of the stock. Generally small cap is considered to be from $300MM to about $2B, compared to a big cap stock that is usually consider a cap of above $10B. Investment in these companies tends to be for those with a higher capacity for risk, as small cap companies tend to not be as stable or seasoned as large cap. This thinking was put under a severe test during this years market meltdown, as many large cap stocks became small cap or even went out of business.
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2nd Nov 2009 In Stocks
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