Global Ecology Corporation (GLEC)

[arbpro]

one company, which I can't back up with a name, that was at a penny and had one CC sale of 700k and the stock went up to .16. Would love that.

Definition of 'Market Capitalization'
The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.

Frequently referred to as "market cap."
http://www.investopedia.com/terms/m/marketcapitalization.asp

The share price is dependent upon market cap. For instance, lets say Company A has a stock price of $1, has net profits of $1,000 and has 10,000 shares outstanding. That would mean the company has a PE ratio of 10, a fair valuation, and has a market cap of $10,000. All these numbers are reasonable valuations that justify a share price of $1, and a market value of $10,000.

But in the case of GLEC, you have a huge 500 million shares outstanding. Lets suppose that GLEC, like Company A, has net profits of $1,000 too. A market cap of $10,000, is achieved upon profits of ONLY .00002 cents per share. At a PE ratio of 10 a fair valuation would be .0002 cents share price.

So share price is dependent upon the number of shares outstanding and net profit per share. So one stock could carry a stock price of one dollar, and another stock could carry a stock price of .0002, when they both have identical net profit.

Another way to say it is that GLEC in order to have a stock price of 1 dollar, like Company A, would need net profits of $50,000,000 and not $1,000.

It's all about the number of shares outstanding and the market cap created.