Sidoti & Company: Launching a Micro-Cap Product
Posted: 14 Feb 2012
Date Written: January 3, 2011
It is 2010 and Sidoti & Company, a New York-based brokerage firm specializing in small capitalization stocks, has just launched a new product - micro-cap stock research. The firm has hired a group of five analysts who will produce written research reports on micro-cap stocks, that is, publicly traded stocks with a market capitalization of less than $250 million. Peter Sidoti, Sidoti & Company's founder and CEO, knows that there is demand for this product. However, he is not entirely certain how this new business will function, both with respect to how the product is distributed and to how Sidoti & Company will get compensated for it. The case discusses Sidoti & Company's business model, and how the new business fits with, and differs from, that model. It discusses the challenges Sidoti faces in making this new business a success.
Learning Objective: Provide students with insight into the stock brokerage business. Discussion of financial and strategic planning at a firm level.
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