What Are Microcap Securities?
Microcaps are usually the small public companies with securities quoted on the over the counter markets. This can include development stage companies with zero revenue as well as household names that are eligible to become uplist to the NASDAQ or NYSE MKT if they so choose.
Microcap securities are generally priced below $5 and are sometimes called “penny stocks” even though many OTCBB or Bulletin Board and other over the counter stocks trade regularly at much higher prices. Likewise, some microcap OTC Issuers have stock that trades below a penny.
Where Are Microcap Securities Quoted?
Microcap securities usually trade in the “over-the-counter” market. Their stocks used to be quoted on the OTCBB though quotations are available now on most trading platforms. Many microcap Issuers that meet certain revenue, asset or market cap requirements can make the move to the NASDAQ or to the NYSE MKT, which was formerly known as the AMEX. When that happens, their shares will also be “listed” on a national exchange.
OTC Bulletin Board (OTCBB)
The OTCBB or “Bulletin Board” refers to FINRA’s electronic inter-dealer quotation system. The Bulletin Board, which has essentially been replaced by the availability of electronic trading platforms available from every brokerage, displayed quotes, last-sale prices, and volume information for many OTC equity securities that were fully reporting under the Securities Exchange Act of 1934.
Not all fully reporting public companies were qualified to be listed on the OTCBB, but now all companies with a trading symbol are quoted on virtually every trading platform. Many industry professionals still use the term “bulletin board” to describe a fully reporting Issuer even if the stock is not actually quoted on the OTCBB anymore.
Each of the experienced microcap securities attorneys contributing to OTCLawyers.com represent microcap public companies, from startups going public to those that are filing to become listed on the NASDAQ or the NYSE MKT national stock exchanges.