Market Capitalization

What is Market Capitalization?

Market Capitalization (Market Cap) is the most recent market valuation of a company’s outstanding shares. The Market Cap is equal to the current share price multiplied by the number of shares outstanding.

The investors often uses the market capitalization value to rank companies and compare their relative sizes in a particular industry or sector. To determine a company’s market cap, simply take its current market share price and multiply the figure by the total number of shares outstanding.

Market Capitalization Formula

Cannabis Market Capitalization Categories

Broadly speaking, based on market capitalization, the stock market classifies stock into various categories:

  • Large Cap – Companies with a market cap above $2 billion are classified as large-cap cannabis stocks. Some examples would be Apple, Microsoft, IBM, Facebook, etc.
  • Mid Cap – Companies whose market cap ranges from $300 million to $2 billion. Mid-cap cannabis stocks, in general, are more volatile than large-cap stocks and consist more of growth-oriented stocks.
  • Small Cap –Companies with a market capitalization between $50 million to $300 million. They are high risk and high return stocks as the companies are in the growth stage. A large number of companies belong to the small-cap category.
  • Micro Cap –They are the penny stocks that are relatively young. The micro-cap companies’ potential for growth and decline are of similar nature. They are not considered to be the safest investment. Hence, they require lots of research before investment.