

Q: Does it really matter which companies have the biggest market values?

A: Investors know that bigger isn't necessarily better. But there's a natural tendency for investors to monitor which companies are the most valuable, anyway.

There's been quite a bit of change in the list of the world's most valuable companies. Apple regained its perch as the No. 1 most valuable company, after being overtaken by ExxonMobil. Meanwhile, Microsoft and Google are jockeying back and forth to capture the No. 3 most-valuable spot.


The race is fascinating for many investors to watch. And the value of a company relative to other companies can be somewhat of a measuring stick to see just how prized a company is. Market value is a factor of the stock price multiplied by the number of shares outstanding, so the higher the market value, the bigger the price tag investors put on it.

Having a high share price can have some tangible benefits for a company. Companies with high market values can often use their lucrative stock as a currency with which to make acquisitions. Investors, too, often view a company's recent rise to the top of the market cap chart as a sign the shares might be getting relatively overvalued.

But the bottom line is that market cap, by itself, is just a measure of value and doesn't really have a direct influence on the financial standing of a company and is more of statistical eye candy.

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