Replies to post #2849 on Investor Help (NO Ihub questions)

[cintrix]

When the stock price drops, the company's valuation drops. It doesn't mean the company loses money - it means they are valued at a lower amount.

[fung_derf]

Market capitalization (or market cap) is the total value of the issued shares of a publicly traded company; it is equal to the share price times the number of shares outstanding. As outstanding stock is bought and sold in public markets, capitalization could be used as a proxy for the public opinion of a company's net worth and is a determining factor in some forms of stock valuation. Preferred shares are included in the calculation.

Market cap is just a value at that particular moment. Nothing more.