Small Companies vs Giant Companies
How big a company is changes how its stock tends to behave.
The idea
Companies come in wildly different sizes, and investors measure size with market cap: the price of one share multiplied by how many shares exist. A small company can grow quickly, but its share price often swings up and down more sharply. A giant company usually moves more slowly and tends to be steadier, though it can still lose value. Neither size is automatically better — they just behave differently, which is why many investors hold a mix. 🌱
Words to know
- Share
- One small piece of a company that you can own.
- Market cap
- The price of one share times the number of shares. It is a way of saying how big a company is.
- Small-cap
- A company with a small market cap, usually a business you may never have heard of.
- Large-cap
- A company with a very big market cap, often a brand you already know.
- Volatile
- A price that jumps up and down a lot instead of moving gently.
Try it — no account needed
Swipe true or false to check what you know about company size.
Market cap means share price times the number of shares.
In the full lesson
- 1True or false
- 2Put it in order
- 3Make the call
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