Market Capitalisation

Market capitalization (or Market Cap)  is the total value of the tradable shares of a publicly traded company; it is equal to the share price times the number of shares outstanding. As outstanding stock is bought and sold in public markets, capitalization could be used to represent company’s net worth and is a determining factor in some forms of stock valuation.

Market Cap = Share Price   x   Number of Shares Outstanding

Companies can be categorised by the size of their market cap:

  • Mega-cap: Over $200 billion
  • Large-cap: Over $10 billion
  • Mid-cap: $2 billion–$10 billion
  • Small-cap: $250 million–$2 billion
  • Micro-cap: Below $250 million
  • Nano-cap: Below $50 million

Example: Google’s Market cap = 209.96B (mega-cap)