Market Capitalization

Benzinga  Sep 28  Comment 
Shares of Galectin Therapeutics Inc (NASDAQ: GALT), a clinical-stage biopharmaceutical company that creates therapies for fibrotic disease and cancer, tumbled nearly 50 percent on Wednesday after the company said that a Phase 2a study called...
Motley Fool  Sep 23  Comment 
A simple list for curious investors.
The Hindu Business Line  Aug 31  Comment 
Riding on a strong stock market sentiment, the total market capitalisation (m-cap) of BSE-listed companies surged to a lifetime high of over Rs 111 lakh crore today.During afternoon trade, the m-cap ...
Channel News Asia  Aug 23  Comment 
This is in addition to current guidelines, where companies with six-month volume-weighted average price (VWAP) of shares of less than S$0.20 are placed under the watch-list.  
The Australian  Aug 17  Comment 
The market has welcomed BHP’s lack of nasty surprises, sharply bidding up the mining giant.


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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