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When I look at my Google finance page, and I look at a company, lets say Citigroup for example, and I see that the market cap is 83.45 billion, what does that mean? Does that mean Stock Price X Number of shares outstanding? Because if so, that doesn't add up. Also, by issuing more shares of a stock, does a company affect their market cap?

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up vote 6 down vote accepted

Market cap is basically the amount of money that it would cost to buy all of the shares of public stock in a company. Or share cost * number of outstanding shares.

It is a measure of how much a company is worth.

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Welcome, harmanjd! I'll add: anybody wanting to actually buy all of the shares of public stock in a company would realize it's impossible to do without their buying activity driving the market price up. So, market cap is more a theoretical figure for valuation. – Chris W. Rea Jan 8 '10 at 1:24
It is actually a measure of how much capital the company has in secondary markets. The company's worth will also include any long term debt obligations it has, private shares, and its realizable assets --none of which appear directly in the market cap (unless of course the share price reflects that information). – Apoorv Khurasia Jun 11 '11 at 6:11

Market cap is the current value of a company's equity and is defined as the current share price multiplied by the number of shares. Please check also "enterprise value" for another definition of a company`s total value (enterprise value = market cap adjusted for net nebt). Regarding the second part of your question: Issuing new shares usually does not affect market cap in a significant way because the newly issued shares often result in lower share prices and dilution of the existing share holders shares.

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