Are MicroCap Insiders Aligned With Shareholders?


Last month, Michael Liu shared a post on WhyMicrocaps discussing the “Insider Dynamics In Microcap Companies“.

Liu says that “Almost every microcap success story is, at its core, a management success story.” and he shares 3 ways microcap insiders signal alignment and confidence to common shareholders.

1. Incentives – “Small salaries and large ownership force insiders to generate the majority of their wealth by growing their business (and therefore stock price), thus aligning them with shareholders.”

2. Insider Transactions – “insider buying can show a lot about near-term developments in microcaps, despite the SEC’s “regulations” guarding against malpractice”

3. Premiums – “Perhaps one of the most guaranteed ways to generate a return in microcaps is buy upon the announcement of a share purchase or conversion at a premium to the then-price.”

Read the full post on WhyMicrocaps HERE


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