Market capitalization

The terms “market capitalization” or “market cap” are often used. These refer to the agreed market value of the equity of a company. Young (or small) companies tend to have lower assets and therefore value - these are the companies usually with a low market cap and therefore lower stock prices. Market cap is the main factor in determining whether this company’s stocks may be classified as being penny stocks.

Microcap or small-cap: interchangeable terms - Microcap and small-cap companies generally have penny stock prices.

Strictly speaking, microcap stocks should be classified as such based on their market capitalizations while penny stocks are looked at solely in terms of price. Definitions may vary, but in general a stock with a market capitalization up to $300 million is defined as a microcap. On the London exchange, this threshold is usually quoted as £100 million