Market Capitalization

Today, we define a large-cap company as one whose stock is valued at over $10 billion, a mid-cap from $1 to $10 billion, a small-cap from $250 million to $1 billion, and a company whose stock value is under $250 million as a micro-cap. Depending on who you listen to or how old your reference is, these definitions will vary.

A related point - don't think a company is big just because it has a high stock price, or that it is small just because its stock price is low.

For example, Disney trading at $23 is not smaller than Barnes & Noble trading at $33, since Disney has 2,048,690,000 shares outstanding (called the "float") and B&N has just 68,585,000 shares. That's a $4.7 billion market cap for Disney versus only $226 million for Barnes & Noble.

The price per share, like the market cap, has nothing to do with how big a company is.

Other Stock Market Basics Topics:

1. Stock Market Basics
   
2. Why invest in the stock market?
   
3. Why Sell Stock?
   
4. How are shares bought and sold on the NASDAQ?
   
5. How stocks are traded on the New York Stock Exchange
   
6. What are ECNs?
   
7. Supply and Demand
   
8. American Stock Exchanges
   
9. International Stock Exchange
   
10. What fuels demand for a stock?
    
11. More to Know About Stock Trading
    
12. Limit Orders
    
13. Market Capitalization
    
14. Preferred Stock
    
15. How to Buy Stock?
    
16. How much money do you need to open a brokerage account?
    
17. Money Market Funds
    
18. Margin Loans and Investment
    
19. Corporation Executive Pay
    
20. How much money do you need to open a brokerage account?
    

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