A few lessons here:
Investors in IQ seem to worrying about the micro (company’s fundamentals, competitive position, growth) more than the macro (inflation, interest rates).
_Be patient and focus on the fundamentals, not the stock price: The company went flat for almost three years and then almost doubled in just a few months.
_There are always opportunities out there if investors look for them.
However, not all micro-cap software names are going to work out like this, the size risk is there, and we think the smaller the market cap, the more diversification investors need. Also when it comes to market cap, investors are better off seeking a larger profitable company, generating positive cash flow and strong balance sheet. IQ is profitable, and has been since 2015. One thing we always point out with such small companies is the cost of being public. Annually, it is estimated that being public costs at least $600,000 (listing fees, regulatory fees, accounting, legal). For a $14M market cap company, this can equate to a 4.2% drag, annually, and is a cost that does not 'create' anything for the company.