Curious Cat Investing Dictionary: Market Cap

Market Cap (Market Capitalization) - Stock price times the number of outstanding shares of stock. Fully diluted market cap multiples the stock price by the number of shares (assuming that all options are exercised and any convertible securities are converted into stock).
The Market Capitalization is used to determine if the company is considered a small cap, mid cap or large cap stock. Those determinations vary across the investment community. A common range would be small cap under $500 million, mid cap $500 million to $5 billion and large cap over $5 billion.

• Enterprise Value - Market capitalization plus debt plus preferred shares minus cash. Alternative to market capitalization as a measure of company value.
• option - the right to purchase shares of stock at a given price (called the "strike price"). Options are quoted in 100 share lots.
• warrants - long term options. Exactly the same as options, but when they are longer term (over a year) they are often called warrants (though referring to them as options is also common)
• convertible bond - a bond with the extra benefit of giving the holder the right to convert the bond into shares of stock. Thus if the stock prices rises the shares of stock it represent may provide more value than the right to receive interest from the company.

• Importance of Enterprise Value, Randy Befumo, Feb 2002, fool.com.

Curious Cat Investing Library
Dictionary: PE ratio, Dollar Cost Averaging , Balance Sheet
Topics: China - Economics - Real Estate - Trading
Great Investors Focus: Darvas - Livermore - O'Neil - Soros
Authors: Levitt - Schwager Investment Bookstore