Understanding smaller listed companies
Basics
What Is a Small Cap?
A small cap is a listed company with a relatively low market capitalisation — depending on the definition, roughly between €300 million and €2 billion. Below that threshold lie micro caps and nano caps.
Read more → BeginnerLiquidity and Spread in Smaller Stocks
The spread is the difference between the buying and selling price. In thinly traded smaller stocks it can amount to several per cent — a loss that occurs the moment you buy and never shows up in the share price.
Read more → BeginnerISIN, WKN and Ticker: Understanding Securities Identifiers
The ISIN identifies a security uniquely anywhere in the world, the WKN is the German short code, and the ticker is the abbreviation used at a particular stock exchange. When placing an order, the ISIN is the most reliable reference.
Read more →Biotech
Clinical Trials: Phase I, II and III
A drug candidate must pass through three clinical phases: Phase I tests safety, Phase II tests whether the drug works in principle, and Phase III tests efficacy at scale. The later the phase, the higher the probability of success — and the higher the share price tends to be.
Read more → FortgeschrittenFDA and EMA: How a Marketing Authorisation Works
The FDA (USA) and the EMA (EU) decide whether medicines may be placed on the market. A submitted application is not the same as a granted approval — months of review and a real risk of rejection lie between the two.
Read more →Balance Sheet & Financing
Capital Increase and Dilution
When a company carries out a capital increase (Kapitalerhöhung), it issues new shares to raise money. This reduces the percentage of the company that existing shareholders own — a process known as dilution.
Read more → BeginnerBurn Rate and Cash Runway
The burn rate is the amount of cash a loss-making company spends each month. The cash runway tells you how many months its money will last: cash balance divided by burn rate.
Read more →Everything in this section is for information and education only. It is not investment advice, not a recommendation and not a financial analysis. Investments in small and micro caps are highly speculative; total loss is possible.