Single-Digit Midget

What Is a Single-Digit Midget?

Single-digit midget is a shoptalk term for a stock with a price that is below $10 per share subsequent to having traded at a lot higher level. The term became a force to be reckoned with in the mid 2000s when Internet companies that had taken off in the late 1990s, called dot-coms, lost value quickly and their stocks traded at drastically lower prices than they had before. Since these stocks have generally either settled or been flushed out of the market, the term isn't utilized normally any longer.

Grasping Single-Digit Midgets

Single-digit midget is a shoptalk term that developed during the mid-2000s when Internet companies that didn't have clear business models or even any mechanism to take in money consumed the venture capital they had gotten and started to fail. Since these companies had traded at such high prices, the fall to trading at under $10 per share was stunning and uncovered the insecurity of the individual companies and of the industry as a whole.

The offending idea of the term is an impression of the disdain investors and analysts felt at the dotcom bubble and the surge of venture capitalists to pour money into companies they didn't have any idea and that they didn't hold accountable for growth plans.

At the time the term was all the more prevalently being used, the word midget wasn't widely viewed as derogatory, so the term was expected to be diverting and annoying, not offensive. The financial meaning of single-digit midget ought not be mistaken for the primary utilization of the phrase to mean a short individual or a military member with less than ten days left to serve before a good discharge.

Reason for Single-Digit Midgets

Constantly half of the 1990s, the Internet became available to the overall population, and companies jumped up with no unmistakable business model. Since the Internet opened up such countless new roads to deliver and collect data and offer types of assistance, lenders and venture capitalists felt that the simple truth that a company was on the Internet meant that it would bring in money.

These spot coms issued [initial public offerings (IPOs)](/initial public offering) with publicity and display, and frequently traded at high sums, notwithstanding having none of the normal indicators that would warrant high stock prices. Throughout the next decade, as venture capitalists and lenders didn't bring in money on these companies in light of the fact that the companies weren't earning revenue, the market reached as far down as possible and stocks that had been selling for many dollars started selling for under $10. Single-digit midget developed as an insulting shoptalk term for these companies that had been fiercely overvalued yet were presently selling for pennies on the dollar.

Highlights

• The term isn't regularly utilized any longer as these stocks have commonly been flushed out of the market.
• Single-digit midget is a shoptalk term for a stock with a price that is below $10 per share in the wake of having traded at a lot higher level, utilized usually to portray stocks after the dotcom bubble burst.
• The offending idea of the term is an impression of the disdain investors and analysts felt at the dotcom bubble and the surge of venture capitalists to pour money into companies they didn't have the foggiest idea and that they didn't hold accountable for growth plans.