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Microcap Stocks: A Brief Overview

Oct 4, 2016 | Stockmarket

microcap-stocks-a-brief-overview In America, small business is a big deal. – Bob Beauprez

Brinen & Associates has a special focus on small and micro cap companies. These types of companies typically have a market capitalization of up to $250 million and offer what’s known as “microcap stocks.”

For all of you new or soon-to-be entrepreneurs and owners, this post serves as a brief overview of microcap stocks and may help you determine if they’re right for your business.

What Qualifies As A Microcap Stock?

A microcap stock is offered by a company with a small market capitalization. Yes, a company that makes in the area of $250 million — money that can buy and sell you and me several hundred times — is considered “small” by the SEC, as we discussed in the summer. Microcap stocks, best known as “penny stocks,” are not the types found on the New York Stock Exchange (NYSE) but instead are issued on the always fun and unpredictable Over-The-Counter Markets (OTC). Penny stocks are risky but relatively inexpensive. That is what you’re offering the public — the chance to gamble on your company.

Why Is It A Gamble For Me?
Several reasons:

  • Your company has no track record, so no one has a reason to invest in your company.
  • Microcap stocks trade in low volumes, and you could be waiting forever for a return of a few hundred bucks.
  • If/when a high volume trade does occur, it could have a major impact on the company.
  • Selling your shares is extremely difficult.
  • As an owner, you won’t know too much about your investors, who could manipulate the stock price and sometimes, the fate of the company.

Where’s The Ref?

Some believe that the benefit of listing on the OTC is that it lacks the volume of regulation seen in other major marketplaces, like the NYSE. So small business owners do not have to make too much information public about their own companies. You can make the appropriate information available on your website and on the SEC’s. There’s a difference, however, between keeping information about you and the company close to the chest and lying. Never present falsehoods about your company or your quoted prices. This is what leads to investment fraud and the suits that follow.

Keeping in mind that this is not the NYSE, you do not need to have minimum net assets or listing standards to list on OTC. There are some requirements you have to meet to be quoted on the OTC Bulletin Board (OTCBB), OTC Link LLC (OTC Link) or Global OTC.

You can find the OTCBB’s eligibility requirements for stocks here and you can find additional information about OTC Link and Global OTC at and, respectively.

If this is your entrance into the world of public listings, congratulations. The OTC markets are like a Rorschach — you might see opportunity where someone else would see calamity. There have been some Cinderella stories that began here, and yours might be next among them. Contact Brinen & Associates for the best ways to offer stock of your company.


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I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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