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52 votes

Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017?

No, a jump in market capitalization does not equal the amount that has been invested. Market cap is simply the stock price times the total number of shares. This represents a theoretical value of ...
Ben Miller's user avatar
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38 votes
Accepted

Can a company with a very large valuation still be held privately?

Is this scenario practically possible? Absolutely - there is no legal requirement in the US to become publicly traded. Are there any examples? The top 25 private US companies all have annual ...
D Stanley's user avatar
  • 139k
29 votes

What does it mean for a company to have its market cap larger than the market size?

The difference between the two numbers is that the market size of a particular product is expressed as an annual number ($10 million per year, in your example). The market cap of a stock, on the ...
Ben Miller's user avatar
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25 votes

How did Google's Stock Split affect market capitalization?

A stock split has no effect on corporate metrics, market stats, shareholder equity, etc. The only things that change are the number of shares outstanding, share price, and the amount of dividend paid ...
Bob Baerker's user avatar
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24 votes

What does it mean for a company to have its market cap larger than the market size?

First read mhoran's answer, Then this - If the company sold nothing but refrigerators, and had 40% market share, that's $4M/yr in sales. If they have a 30% profit margin, $1.2M in profit each year. ...
JTP - Apologise to Monica's user avatar
20 votes
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What is market capitalization?

Market Capitalization is the equity value of a company. It measures the total value of the shares available for trade in public markets if they were immediately sold at the last traded market price. ...
NL - SE listen to your users's user avatar
17 votes

Can a company with a very large valuation still be held privately?

Twitter/X Not only can companies remain privately held throughout their lives, they can also go public and then revert to private ownership, as in the recent case of Twitter. This list of other large ...
Lawnmower Man's user avatar
16 votes
Accepted

When the market cap goes down, does that mean people are taking money out?

At face value, 'Market Capitalization' is a simple calculation: Number of units in the market * market price = Market Capitalization So the market capitalization of Apple is equal to the number of ...
Grade 'Eh' Bacon's user avatar
15 votes

What does it mean for a company to have its market cap larger than the market size?

If you are calculating: the market size as the annual sales of all refrigerators at $10 million; and the market cap as the value of Company A's shares times the number of shares being equal to $20 ...
mhoran_psprep's user avatar
12 votes
Accepted

BITCOIN: on a chart what does it mean for the USD price to be higher then marketcap?

The blue and green curves have different vertical scales. One being "above" or "below" the other is just a matter of how the scales are chosen -- it's not a feature of the actual numbers being plotted....
hmakholm left over Monica's user avatar
12 votes

Can a company with a very large valuation still be held privately?

And then there's even the extreme case of Dyson, which is reported to be 100% owned by a single person, founder James Dyson. The company made $7.8 billion in 2022. Since it is private the valuation is ...
jcaron's user avatar
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11 votes
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Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017?

Stock A last traded at $100. Stock A has 1 million shares outstanding. Stock A's market cap is $100 million. No seller is willing to sell Stock A for less than $110 a share. One buyer is willing to ...
PoorRichard's user avatar
10 votes

What is market capitalization?

Market capitalization is one way to represent the value of the company. So if a company has 10 million shares, which are each worth $100, then the company's market capitalization is 1 billion. Large ...
Nosrac's user avatar
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10 votes
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Mismatch between market cap and shares outstanding*price

Yahoo isn't tabulating/updating the data properly and not mentioning the full details. I had a glance at the annual report for 2016. You would need to trawl through the Annual Report on how they ...
DumbCoder's user avatar
  • 10.6k
10 votes

Can a company with a very large valuation still be held privately?

In the US, at least, there is no requirement to take a company public. Remember that the reason for selling stock is to turn part of the company's value into money. If the company is profitable enough ...
keshlam's user avatar
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7 votes

Mismatch between market cap and shares outstanding*price

Bloomberg states that they have 162.71M shares outstanding. Multiplying by 94.3 from above I get 15,343,553,000 or 15.344B which is near enough the reported 16.58 B. It looks like the number of shares ...
MD-Tech's user avatar
  • 9,071
7 votes
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Why crypto price increases when market cap increases?

You can't buy more bitcoins. There are a certain number of bitcoins that exist at any given time. You can't change that by spending money. If Alice and Bob each bought bitcoins worth $20 from Jim who ...
Stack Exchange Supports Israel's user avatar
6 votes

Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017?

The market capitalization of a stock is the number of shares outstanding (of each stock class), times the price of last trade (of each stock class). In a liquid market (where there are lots of buyers ...
Yakk's user avatar
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6 votes
Accepted

Why doesn't the market capitalization of a company match its acquisition price during a takeover?

Short answer: google finance's market cap calculation is nonstandard (a.k.a. wrong). The standard way of computing the market capitalization of a firm is to take the price of its common stock and ...
farnsy's user avatar
  • 15.1k
6 votes

Is there a theoretical advantage for market cap weighted index funds over equal weighted index funds?

Any of the indexes you are likely to find funds that track are going to be market cap weighted. The Dow Jones Industrial Average is just about the only equal weighted index you'll come across. There ...
Justin Cave's user avatar
  • 27.8k
5 votes

When the market cap goes down, does that mean people are taking money out?

It does mean that some people are taking money out, but it does not mean that $120 Billion has been converted to cash. The current price of bitcoin (or a stock, or anything in an exchange) is simply ...
Ben Miller's user avatar
  • 116k
5 votes

Rapids (RPD) cryptocurrency: 3190500% increase in 1 hour

How is it possible for a cryptocurrency to have a $398bn increase in market capitalization with only a volume of $480k? It is possible. To illustrate: Imagine a cryptocurrency with 1 million coins ...
Flux's user avatar
  • 17.1k
5 votes

Is the cryptocurrency market determined by the market caps of each individual coin?

A different view may be helpful, to avoid confusion with “market caps”: There’s a lottery that has given out 10 million lottery tickets. They have no money, but they decided that every ticket is worth ...
gnasher729's user avatar
  • 23.4k
5 votes

Google capitalzation vs Apple $3T

The market cap reported is the total market cap of all classes of shares that have ownership rights, so it's incorrect to add the reported market cap of each class. So it's the "size" of ...
D Stanley's user avatar
  • 139k
4 votes
Accepted

What does "marking down" a startup mean?

There is no magic involved, merely a change in Fidelity's analysts' expectations of the future profitability of some startups. The current value of a firm (as some other posts indicate) is the net ...
MD-Tech's user avatar
  • 9,071
4 votes

When the market cap goes down, does that mean people are taking money out?

In many cases, no. Say you own a house, are trying to sell it at $200,000 and half of it burns down. You obviously have to reduce the asking price significantly if you want to get it sold, even though ...
Philip's user avatar
  • 5,768
4 votes

what is more to Market Capitalization formula?

I'll admit upfront that this isn't a perfect answer, but I hope it can get you moving in the right direction. There has been a very large increase in the number of shares. My best guess is that a ...
Escaped Lunatic's user avatar
4 votes

what is more to Market Capitalization formula?

Generally speaking, issuing new stocks is just a way to raise money to operate the business, see e.g. Why is stock dilution legal? For Virgin Galatic, the situation is a bit different though. While ...
Solarflare's user avatar
  • 2,683
4 votes

Can a company with a very large valuation still be held privately?

There is certainly no reason why a company, of any size, must go public, at least in the U.S. There are really only two reasons to go public, realistically: The company can raise capital and would ...
Jeffiekins's user avatar
3 votes

Does market cap include ALL shareholders, including a company's founders and largest institutional investors?

Yes, by definition the market cap is the total market value of all the shares.
NS0's user avatar
  • 221

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