When you hear that "AT&T (NYSE:T) is up 2 1/2 today," do you ever wonder whether that's dollars per share, or points, or what? Know that stock prices are listed in dollars per share. They're not always in whole numbers, though. The world of stock prices has traditionally been full of fractions, all the way down to 64ths, and occasionally even smaller ones. So, if you saw the Home Surgery Kits Co. (ticker: OUCHH) listed at "28," that meant it last traded at $28 per share. Similarly, $15 17/32 meant 15.53125, or $15.53 per share.
The stock market has recently switched from fractions to decimals, though, so if you see "86.97," know that that just means $86.97. The decimals still reflect prices per share in dollars.
Another way to think of a price move is to consider how much total market value the company has gained or lost with each move. Find out the number of shares outstanding the company has. (Do this via online stock research tools, your newspaper, or the firm's financial statements.) Multiply the number of shares outstanding by the current share price, and you'll get the company's "market capitalization." If OUCHH has 200 million shares outstanding and is trading at $40 per share, its market cap is $8 billion. If its share price drops by $2 per share, the company has lost $400 million in market value.
You can learn more about how to interpret financial statements in our "Crack the Code: Read Financial Statements Like a Pro" How-to Guide. Give it a whirl -- what do you have to lose, except your fear of financial statements?
