Market capitalization, often abbreviated as “market cap,” is a measure used to assess the total value of a publicly traded company. It’s calculated by multiplying the company’s current stock price by the total number of outstanding shares. In essence, market cap represents the theoretical cost of buying all of a company’s outstanding shares at the current market price.
Market cap is widely used by investors and analysts to gauge the size of a company and its relative importance in the financial markets. It’s also used to categorize companies into different classes such as large-cap, mid-cap, and small-cap, which helps investors understand the risk and growth potential associated with investing in a particular company.