I wanted to do some research on the pros and cons of capitalization. For some reason or other Nortel Networks history sticks in my mind. Remember when Nortel's market cap was larger than all six major Canadian banks? Now unfortunately, Nortel is just about kaput. Their extraordinarily large market cap in 2000 means nothing now except for many of its former employees whose retirement funds are in extreme jeopardy.

In my research I found some interesting stuff on Investopedia relating to the small firm effect and capitalization. I found the sentence dealing with the "correction of problems" to be interesting.

What Does Small Firm Effect Mean?

A theory that holds that smaller firms, or those companies with a small market capitalization, outperform larger companies. This market anomaly is a factor used to explain superior returns in the Three Factor Model, created by Gene Fama and Kenneth French - the three factors being the market return, companies with high book-to-market values, and small stock capitalization.

Investopedia explains Small Firm Effect

The theory holds that smaller companies have a greater amount of growth opportunities than larger companies. Small cap companies also tend to have a more volatile business environment, and the correction of problems - such as the correction of a funding deficiency - can lead to a large price appreciation. Finally, small cap stocks tend to have lower stock prices, and these lower prices mean that price appreciations tend to be larger than those found among large cap stocks.

Any comments with regards to Spider Resources?

Snug