Float-adjusted market cap

Float-adjusted market cap is a company's market value calculated using only its float, the shares available for public trading, rather than its total shares outstanding.

The formula is:

Most major index providers, including S&P Dow Jones Indices and MSCI, use float-adjusted market cap rather than plain market capitalization to decide how much weight a company gets in their indexes. A company where a founder or the government holds a large, essentially untradeable stake would have an outsized index weight under plain market cap, even though the public can only ever buy the smaller floating portion. Adjusting for float keeps an index's weighting closer to what investors can own.

The gap between market cap and float-adjusted market cap can be significant for companies with dual-class shares, a large founder stake, or a controlling government or family ownership position. A company with a huge headline market cap but a small float may carry far less weight in a major index than its total size would suggest.