Market Cap Defined: Market capitalization or market cap is one way to compare two different stocks that have similar market prices.
A market cap valuation is an additional method for grouping stocks outside of their sector or industry.
Market Cap or Market Capitalization = Total Outstanding Common Shares x Current Market Price Market capitalization is not strictly defined, but the following are widely accepted cap sizes:

• Mega Cap:
• Cap Size: $200 Billion +
• Alternate Name:Blue Chip
• Example:CitiGroup Inc.
  
• Large Cap:
• Cap Size:$10-$200 Billion
• Alternate Name: Blue Chip
• Example: Coca Cola Co.
  
• Mid Cap:
• Cap Size: $2-$10 Billion
• Alternate Name: Growth Stock
• Example: Abercrombie & Fitch
• Small Cap:
• Cap Size: $300 Million-$2 Billion
• Alternate Name: --
• Example: 1-800-Flowers.
  com
• Micro Cap:
• Cap Size: $50-$300 Million
• Alternate Name: Penny Stock
• Example: Miva Inc.
  
• Nano Cap:
• Cap Size: Less than $50 Million
• Alternate Name:--
• Example: Adams Golf Inc.
  

Common Misunderstanding: A common misunderstanding held by novice investors is to judge the size of a company based on its stock price.
It is not always the case that a company with a higher stock price is larger than a company with a lower stock price.
Example where stock price and market capitalization are greater:

• Google Inc:
• Market Cap:$120.
  83 Billion
• Market Price: $397.
  00 Per Share
• Yahoo Inc.
  
• Market Cap: $35.
  41 Billion
• Market Price: $25.
  65 Per Share

Example where stock price is greater, but market capitalization is less:

• JP Morgan Chase & Co.
  
• Market Cap: $163.
  92 Billion
• Market Price: $47.
  22 Per Share
• Morgan Stanley
• Market Cap: $77.
  56 Billion
• Market Price: $72.
  35 Per Share

General Inferences: Market cap size can indicate the growth rate of a company.
Typically, the larger the market cap, the more stable and less growth potential a company has.
However, in the above example, Google Inc.
has grown quickly over the past 8 years and continues to show signs of positive growth: Google News.
This quick growth rate is not a common characteristic held by public companies.
It is important to understand that market capitalization may fluctuate because of acquisitions, divestitures, and stock repurchases; these reasons may be unrelated to stock performance.