Market Capitalization
The total dollar value of a company's shares — its price multiplied by shares outstanding.
What Market Capitalization means
Market capitalization (market cap) is calculated by multiplying a company's share price by the total number of shares it has issued. It gives a rough measure of a company's size: large-cap, mid-cap and small-cap refer to different size brackets. Market cap is useful for understanding what share of the market a stock represents, and it is recomputed constantly as the share price moves.
Example
A company with 1 billion shares trading at $50 has a market cap of $50 billion. Market cap changes as the share price changes, even if the company's business performance hasn't altered.
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Disclaimer
Definitions are simplified for educational use and are not personalized financial, investment, tax or legal advice.