The Under $300 Million Market Cap Class - YouTube

I’m attorney Laura Anthony founding partner of Anthony PLLC, a full service corporate,

securities, and business transactions law firm.

Today is the is the first in a LawCast series talking about the under 300 million class

of public companies.

Depending on whom you ask, a public company with less than $300 million market cap could

be considered a micro-cap company, a penny stock, unless their share price is over five

dollars, a lower middle market company or even middle market.

Divestopedia defines “lower middle market” as “the lower end of the middle market segment

of the economy, as measured in terms of annual revenue of the firms.

Firms with an annual revenue in the range of $5 million to $50 million are grouped under

the lower middle market category.”

Wikipedia defines “middle market” as “companies larger than small businesses but smaller than

big businesses that account for the middle third of the U.S. economy's revenue.

Each of these companies earns an annual revenue of between $100 million and $3 billion.”

In a speech to the Greater Cleveland Middle Market Forum, SEC Commissioner Robert J. Jackson,

Jr. defined a middle market company as those with trailing twelve-month sales of $50 million

to $1 billion.

As I’ve written and filmed about previously, Bank of America, and their brokerage, Merrill

Lynch, will not transact business in the securities of companies with less than a $300 million

market cap and less than a $5.00-per-share stock price.

Moreover, even if the stock price is over $5.00, such transactions or requested trades

will face increased scrutiny and may not be processed right away.

Bank of America clearly thinks that under $300 million is a micro-cap company.

I realize that I am interchanging between market cap and revenue, but that is also common.

For example, SEC rules define a smaller reporting company or SRC as one with less than a $250

million public float or if the company does not have an ascertainable public float or

has a public float of less than $700 million, an SRC will be one with less than $100 million

in annual revenues during its most recently completed fiscal year.

A Google search for definitions of micro-cap, small-cap, lower middle market and middle

market resulted in as many variations to the definition, based on both revenues and market

cap, as Google pages that I took the time to peruse.

Last summer the Investor Responsibility Research Center Institute, or IRRC, published a report

titled “Microcap Board Governance” providing some interesting information on public companies

with less than $300 million in market capitalization.

Leaving aside the semantics of the class size of these companies, this LawCast series will

summarize some of the information in the IRRC report and add my usual commentary.

I am securities attorney Laura Anthony, founding partner of Anthony PPLC and producer of LawCast.

Should you have any questions about today’s topic, please visit Securitieslawblog.com

and LawCast.com, or contact me directly.

Inquiries of a technical nature are always encouraged.