What is Market Value/Capitalization?

What Investors are Thinking at the Moment

The market value reflects how the investing community puts a price on a business or particular asset. It captures how investors feel about the future prospects of a company since it is an aggregate of estimated future returns for the stock of a company. 

Equity markets are always forward thinking so this is why stocks trade on the future of the company rather than the current situation. This is also known as the market capitalization for a company and can be easily viewed on popular finance websites like Yahoo Finance. Screenshot a bit further down as well!

In the marketplace, publicly traded companies can be either small-cap, mid-cap or large-cap when it comes to their market value. Depending upon the future outlook of the company in the eyes of investors, market capitalization/ value is continuously subject to change.  

It is important to note that market value is just one financial metric when analyzing a company as well. There is book value (shareholder’s equity) and enterprise value as well to take into consideration.  

Apple as of 9/7/2022 had a market capitalization of $2.477T. If you were to check this today, you would most likely notice that the market value is different. To calculate this use the below formula.

Market Capitalization= Share price x Shares outstanding

Shares outstanding: 16.41 Billion

Price of stock: $151

16.4 x 151= ~ $2.477T

Some assets because they are highly illiquid (not easy to buy/sell quickly) or traded over the counter, it will be difficult to obtain an accurate real time quote. This can sometimes be most evident in real estate or fine art.