# What does market cap (or market capitalization) mean?

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?

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.

http://en.wikipedia.org/wiki/Market_capitalization

• 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. Jan 8, 2010 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). Jun 11, 2011 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.

Market Capitalization: Market Capitalization also known as the market cap, it is the total value of a company. The market cap helps in knowing how big or small a particular company is according to its share capital. The market capitalization is affected by the fluctuation in the share price of the company.

Calculation of Market Capitalization: Market capitalization is calculated by multiplying the company’s outstanding share capital with the current share price of the company.

Market Capitalization= Total No. of Outstanding Share × Current Share Price

Outstanding Share: Outstanding shares are those shares which are issued by the company and available for trade on the stock exchange. As well as the promoters, investors and restricted shares also known as the outstanding share. Outstanding shares are those which are issued by the company, but not repurchase.

Free Float Market Capitalization: Free Market Capitalization means using only the share price of that shares which are on trade in the market for calculating market capitalization.

Free Float Market Capitalization = No. of tradeable shares × Current price of shares

The number of trade-able shares is available on the website of NSE and BSE. Trade-able shares do not include the shares of shareholders or promoters.

Mainly there are three types of Stocks:

1. Large Cap Stock: Large Cap Stocks are those whose capitalization value is more than 1000 crore. These type of stocks are low risk-taking than mid cap and small cap. Which means these stocks are more secured.
2. Mid Cap Stock: Mid Cap Stocks are those whose capitalization value is between 500 crores to 1000 crore. These stocks are neither more risk-taking nor less risk-taking.
3. Small Cap Stock: Small Cap Stocks are those whose capitalization value is less than 500 crore. These stocks are more risk-taking as it is for less time.
• What's a crore? Jul 7, 2018 at 17:22