Market Cap

What it is\nThe price the public market is currently putting on the entire equity of a business. Apple at $190/share with 15B shares = $2.85T market cap.\n\n## What it is NOT\nMarket cap is not the cost of buying the whole business. That's enterprise value (market cap + debt − cash). Market cap is just the equity slice.\n\nMarket cap is not the company's "size" in any economic sense. Two companies at $10B market cap can have wildly different revenue, employees, profit, and economic footprint.\n\n## How it's used\n- Index inclusion: most major indices (S&P 500, Russell 1000) weight by market cap\n- Liquidity: larger market cap = more shares trading per day = easier to buy/sell without moving the price\n- Categorisation:\n - Large cap: > $10B (the S&P 500 and similar)\n - Mid cap: $2B–$10B\n - Small cap: $300M–$2B\n - Micro cap: < $300M\n\n## Why size affects strategy\nLarger companies are studied by hundreds of analysts; mispricings are rarer. Smaller companies are followed by fewer eyes; mispricings are more common but with higher transaction-cost and liquidity drag. Most academic literature on "the value premium" finds it stronger in small-cap territory.