Market Capitalization

The term Market Capitalization refers to the market value of the outstanding shares of a publicly traded company. Market Capitalization is calculated by multiplying the current stock price per share with the shares outstanding shares. The outstanding shares are found by subtracting shares held by the company with total issued shares in the company. Both Common and Preferred Shares are used to calculate the Market Capitalization.

In the United States, publicly traded companies are normally grouped into categories, based on their market capitalization:

  • Mega Cap Stocks: Companies with a market capitalization in excess of $200 billion are typically defined as Mega Cap Companies.
  • Large Cap Stocks: Companies with market capitalization from $10 billion and up to $200 billion in total market capitalization are defined as Large Cap Companies.
  • Mid Cap Stocks: Companies with market capitalization from $2 billion and up to $10 billion in total market capitalization are defined as Mid-Cap Companies.
  • Small Cap Stocks: Companies with market capitalization from $300 million and up to $2 billion in total market capitalization are defined as Small-Cap Companies.
  • Micro Cap Stocks: Companies with market capitalization from $50 million and up to $300 million in total market capitalization are defined as Micro-Cap Companies.
  • Nano Cap Stocks: Companies with a market capitalization of less than $50 million are referred to as Nano-Cap Companies.

 

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