🔍 Analysing companies · Lesson 73
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Market cap — how big is the company?
Share price × number of shares = total value of the company.
The idea
How big is a company, really? Not the share price — that can fool you. The real measure is market cap: the share price times the total number of shares. A $20 stock can be a giant if there are billions of shares. Bigger companies tend to be steadier; smaller ones can grow faster but bounce around more. 🏛️
Words to know
- Market cap
- A company's total size in dollars — share price times the number of shares.
- Share price
- The cost of one share; on its own it does NOT tell you how big a company is.
- Large-cap
- A big, well-known company — usually steadier and more stable.
- Small-cap / micro-cap
- Smaller companies that can grow faster but tend to swing more wildly.
Try it — no account needed
Two companies. A is $20/share, has 50 BILLION shares. B is $400/share, has 100 million shares. Which is bigger?
In the full lesson
- 1Make the call
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