Market Capitalization

RECENT NEWS
The Times of India  Sep 13  Comment 
Symphony Ltd has entered in to the league of ‘Large Cap’ category stocks. The Ahmedabad based company has made tremendous turnaround in a decade’s time and crossed Rs 5,000 crore market capitalization.
SeekingAlpha  Sep 11  Comment 
By Weighing Machine: GoPro (NASDAQ:GPRO) shares are up nearly 3-fold from their $24 IPO price. While the company makes some very cool products, speculative investors have become irrationally exuberant about the company's prospects as evidenced by...
The Hindu Business Line  Sep 7  Comment 
The disruption caused by global enterprises going digital can impact market capitalisation of around $30 trillion across eight key verticals, according to a study by advisory firm Zinnov.
The Economic Times  Sep 5  Comment 
The victory of Modi-led BJP in the May 2014 election has provided a major boost to investors tired of tepid economic growth & a weak govt.
The Economic Times  Sep 5  Comment 
Analysts on the Street see it rising further in a matter of just two years if macros improve and reforms taken by the govt start taking shape.
SeekingAlpha  Sep 2  Comment 
By Brian Gilmartin, CFA: As a former analyst, now portfolio manager, being a data geek goes hand-in-hand with assessing various market, sector and individual security risks. Often, if the data can't be found in one place, a spreadsheet is...
Forbes  Aug 27  Comment 
Rising incomes means healthy results for Malaysia's IHH, which leads a pack of private-hospital operators offering a growing middle class more choices.
The Economic Times  Aug 7  Comment 
At present India’s market cap-to-GDP ratio is at an attractive 70% compared to its long-period average of 72%, Motilal Oswal said in a report.
Financial Times  Aug 3  Comment 
Underperformance of small-caps on the Russell 2000 index last month by 4.4 percentage points is the largest amount since October of 2009
The Economic Times  Jul 9  Comment 
"A lot of infra stocks fall in the midcap space, a lot of stocks have run ahead of expectations. So there could be a possibility."




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Market Capitalization equals the price per share of a company times the number of shares outstanding

Market Capitalization, often shortened as "Market Cap", is the total market value of a company's outstanding shares. Market capitalization is calculated by multiplying the number of shares outstanding (this includes the value of all listed categories of a corporation's stocks - preferred stock, common shares, etc) by the market price per share which is the current value of a company. For example, if a company has 10 million shares, and the current price per share is $10, then the company's market capitalization is (10 million shares x $10), or $100 million.

Market cap is the public market's gauge of how much a company is worth.

Classification of Market Cap

  • Small cap companies with a market cap under $1B (under $2B in some classifications)
  • Mid cap companies with a market cap between $1-5B ($2B to $10B in some classifications)
  • Large cap companies with a market cap over $5B (over $10B in some classifications)

You may also see reference to "Mega cap" ($200B or more), "Micro cap" ($50M to $300M) and even "Nano cap" (under $50M).

Examples of Mega cap include companies like Exxon Mobil and Apple (AAPL).

Examples of Large cap include companies like Google.

Market Cap Classes and Risk

For investors it is important to have some knowledge of how different classes behave. In general, the larger the market cap the greater the stability and the lower the risk. In general, large caps are mature companies and small caps are younger, growing companies. Small caps carry greater risk, but also more upside potential than large caps.

Some mutual funds focus on specific market cap classes and some strive for a mix of different classes.

Other Uses of Market Cap

The market capitalization or size of an industry, or entire stock exchange or entire nations may be calculated.

By the end of 2007 the market cap of the NY Stock Exchange was $15.65 trillion. Including the American SE and NASDAQ the total market cap for the US was $19.92T. The market cap for the entire world was just more than $55T at that time.

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