What it is
Market cap is the total value the stock market is currently placing on a company's equity. Multiply the current share price by all outstanding shares.
Why people use it
It's the quickest first-pass measure of company size. Market cap is also the basis for the standard size buckets:
- Large-cap — typically > $10B
- Mid-cap — ~$2B – $10B
- Small-cap — ~$300M – $2B, with micro- and nano-cap below
Market cap is NOT the price someone would pay to acquire the whole company — that's enterprise value, which adds debt and subtracts cash.