Calculate the free-float market capitalisation from total shares, free-float percentage, and stock price to see the value of publicly tradeable shares.
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Market Structure
Free-float market capitalisation measures the total value of a company's publicly tradeable shares, excluding insider holdings, government stakes, and other restricted blocks.
Major index providers (S&P, MSCI, FTSE) use free-float market cap rather than total market cap for index weighting. This ensures that index weights reflect actually tradeable shares, not locked-up holdings.
A low free-float percentage means fewer shares are available for public trading, which typically leads to lower liquidity, wider bid-ask spreads, and higher price volatility.
Multiply total shares by the free-float fraction and the stock price.
Free-Float Market Cap = Total Shares × Free-Float % × Price
Free-float shares = Total Shares − Locked Shares (insiders, founders, governments, strategic holders).
100 million total shares, 75% free-float, 25 per share. Free-float shares = 75 million. Free-float market cap = 75M × 25 = 1.875 billion.
Free-float percentage estimates vary by data provider. Does not account for short-term trading restrictions or 13D filers who may sell.
Frequently asked questions
Free-float weighting reflects the actual investable opportunity. If 50% of a company's shares are held by the government, only the other 50% can be traded — full market cap would overstate that company's weight in the index.
Insider holdings, founder stakes, government ownership, strategic cross-holdings, and shares subject to lock-up agreements. Definitions vary slightly by index provider.
Lower free-float means fewer shares available for trading, leading to lower liquidity, wider spreads, and potentially higher volatility. Institutional investors may avoid very low free-float stocks.
Index providers (S&P, MSCI) publish free-float factors for constituent companies. Financial data services (Bloomberg, Reuters) also provide free-float estimates.
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