Market Capitalization

Basics

Market Capitalization is the total value of a company’s outstanding shares and the current price per share.  It goes from Large Cap, the big boys - the largest companies, to Micro Cap, the small ones just getting off the ground. These are the commonly used dollar amounts, although some investors and analysts use different dollar amounts, when discussing market capitalization.  Some even speak about Mega Capitalization, companies valued over $100 billion.



 

MARKET SIZE CAPITALIZATION

Large Cap Over $5 billion
Medium Cap $1 to $ 5 Billion
Small Cap $250 million to $1 Billion
Micro Cap Under $250 Million

Most of the market Indexes are based on market capitalization.  I have tried to give you an example of a few companies in each that you may be familiar with.
 

Large Cap

These are the largest, most well known companies with market capitalization over $5 billion. Companies such as: Wal-Mart, Microsoft, General Electric, Apple, Exxon Mobil.  Most of these old established companies are one the New York Stock Exchange (see Stock Markets & Security Exchanges).

 

Medium Cap (Or Mid Cap)

This is the next step down in size, those between $1-$5 billion.  You probably are familiar with many of these stocks as well.   Most have been established for a while, although not as long as the large cap stocks:  Quicksilver Resources, Netflicks, Aeropostale, Priceline.com., are a few of the Mid-Cap stocks.

Small Cap

These are younger, smaller companies with a size of $250-$1 billion dollars.  You might have heard of a few, but not as many: Caterpillar, Comcast, Ethan Allen Interiors, Universal Electronics.

Micro Cap

These are the smallest, emerging companies with market capitalization under $250 million.  Probably you have not heard of most of these companies:  Wet Seal, Finish Line, Krispy Kreme Doughnuts.