Market Capitalization
Market capitalization is share price times diluted shares — the market value of residual equity, not the value of the firm.
Definition
Market cap = price × shares (fully diluted if you are being honest). It ignores net debt. Index weights, size factors, and ‘mega-cap’ talk are market-cap objects. Enterprise value is the whole-firm cousin.
Why it matters
Liquidity, indexation, and factor buckets are cap-weighted. A buyback that shrinks shares can lift price and shrink cap, or the reverse if the multiple expands.
Case
A 2% buyback at a rich multiple can cut share count and still raise market cap if the tape treats the bid as a signal. Size did not create value; the multiple did.
How to read it
State basic vs diluted and whether you include convertibles. Never compare market caps across different net-cash positions.