Small-Cap Stock

A small-cap stock generally has a market capitalization between $300 million and $2 billion. Small caps offer more room for percentage growth than large caps (doubling a $500M company is a very different task than doubling a $500B one) but come with thinner trading volume, less analyst coverage, and more volatility.

Small caps are also where dilution risk runs highest: with less access to cheap debt, small companies often fund growth or cover losses by issuing new shares, which can quietly erode existing shareholders' stake even while the business itself is doing fine operationally.