GLOSSARY // Fundamentals
Market Cap
Market capitalization is the total market value of a company's equity: share price times shares outstanding. A company with 400M shares at $25 has a $10B market cap.
Market cap, not share price, is the size of the company. A $500 stock with 10M shares out is a $5B company; a $5 stock with 10B shares out is a $50B company. "Cheap" and "expensive" per share mean nothing without the share count.
The standard size buckets: large cap above $10B, mid cap roughly $2-10B, small cap $300M-2B, micro cap below $300M. The buckets matter in practice because index funds are sorted by them — crossing into the S&P 500's range brings forced buying from every fund tracking it.
A company has 400M shares outstanding trading at $25: market cap = 400M x $25 = $10B. If the stock rises 10% to $27.50, the market cap becomes $11B — the market just repriced the whole company $1B higher, even though no shares changed hands at the new price except the ones that traded.
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Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.