What is market cap?

December 2, 2022

Market capitalization, or market cap, is a measure of the size of a company. It is calculated by multiplying the total number of a company’s outstanding shares by the current market price of one share. For example, if a company has 100 million outstanding shares and the current market price of one share is $50, the company’s market cap would be $5 billion. Market cap is used as a way to compare the relative size of different companies, and it is an important factor in many investment decisions. Companies with high market caps are generally considered to be well-established and financially stable, while those with low market caps may be seen as riskier investments.

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