Market capitalisation
Market cap is the share price multiplied by the number of shares — what the market thinks the whole company is worth.
A $300 share price does not make a company big. A company with 300 million shares at $10 is worth more than one with a million shares at $300. Market cap is the number that actually compares two companies.
It also explains why a share price alone tells you nothing about whether a stock is cheap. Price per share is arbitrary — companies split shares and the price halves without anything changing.
In Stoxhatch
Useful when comparing two tickers in a group idea: a 10% move in a giant company and in a tiny one are very different events.
Related
- Share — A share is one unit of ownership in a company, so owning a share makes you a part-owner of the business.
- Ticker — A ticker is the short code that identifies a company on the stock market, like AAPL for Apple.
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