Market Capitalization
Looking at the top ten
When you buy a stock, you purchase some number of shares. Let’s say it’s ten shares. And, you obviously have to pay some price for those shares. Let’s say it’s twenty dollars per share. If you multiply the ten shares by the twenty dollar cost then the total transaction equals two-hundred dollars. Easy stuff.
Let’s say that instead of ten shares you wanted to buy all of the shares out there for some company. You would then have to (in a simple theoretical scenario) pay the share price times the number of shares outstanding to do that. If you did it though, you would basically own the entire company so it’s a pretty important metric, as it assesses how a publicly traded business costs and, therefore, its valuation. That valuation amount is referred to as a company’s total market capitalization.
Since each company has a different share price as well as a different number of shares outstanding, you can make comparisons in their market valuation. Some are worth more than others and if you take the top ten most valuable companies out there it looks like this:
Everyone knows that tech companies have become very valuable but, wow, they have the top five spots and are far ahead of the rest of the pack. I think it’s really useful to track this on a regular basis so I made a tool that will regularly update with the latest market information and published it at the following link to make it easier to do that: