A small cap company is a company whose
market capitalization
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders.
Market capitalization is equal to the market price per common share multiplied by ...
(
shares x value of each share) is considered small. In the United States, this includes market caps from $250 million to $2 billion (as of 2022).
Overview
A small cap company typically has under $2 billion market cap. Small companies generally are not able to secure the best (
prime) borrowing rates and wield reduced power, including a smaller
market share
Market share is the percentage of the total revenue or sales in a Market (economics), market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those ...
. Being small, they are also less financially stable than larger companies, and are more likely to become
bankrupt
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the de ...
. However, they do generally have more
growth potential and over time have greater but more volatile expected returns.
See also
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Mega-cap
Megacap stocks are stocks with a capitalization or market value over $200 billion. In business and investing the market capitalization term megacap stock is also referred to as mega-cap in the United States. The companies are the largest p ...
, over $200 billion
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Large-cap, $10 billion to $200 billion
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Mid-cap, $2 billion to $10 billion
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Micro-cap, $50 million to $250 million
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Nano-cap
In business and investing, term microcap stock (also micro-cap) refers to the stock of public companies in the United States which have a market capitalization of roughly $50 million to $250 million. The shares of companies with a market capitali ...
, less than $50 million
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List of public corporations by market capitalization
The following is a list of publicly traded companies having the greatest market capitalization, sometimes described as their "market value":
Market capitalization is calculated by multiplying the share price on a selected day and the number of ...
*
Market price
A price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, especially when the product is a service rather than a phy ...
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Authorised capital
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Treasury stock
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Market capitalization
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders.
Market capitalization is equal to the market price per common share multiplied by ...
References
Publicly traded companies
Business terms
Small business
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