The total market value of a company's outstanding shares, calculated by multiplying the current share price by the number of shares outstanding. Market capitalization is used to categorize companies by size and investment characteristics.
Shortened from 'market capitalization', where 'market' refers to the trading market value and 'capitalization' comes from Latin caput (head), referring to the total value or 'head count' of ownership. Term became standard in the 1960s with computerized trading.
Market cap can be misleading because it assumes you could actually buy every share at the current price - in reality, trying to buy an entire company would drive the price up dramatically, making the true acquisition cost much higher!
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