This is the total value of the company
in the market, and depending on the number of shares issued, it is where its
stock derives its value from. When a company is being bought out by another
corporation at a premium or more than its current market value, it is reflected
by a huge spike on the share price of the company being bought. Market cap should
be the primary figure to use when comparing the size of the company. A company
with a stock price trading at $142 doesn't mean it is greater in size than a
company whose stock is trading at $25. For example, Intel corporation (INTC)
has a market value of over 149 billion and its stock is trading at $25 and change.
While, Sears Holdings Corp.'s (SHLD) market value is just over 20 billion dollars.
That is only 13.4% of Intel Corp.'s market value but yet, Sears Holdings corp.'s
stock is trading at $142 per share.