Typically market cap is defined as stock price multiplied by the total number of shares outstanding. I've pulled those numbers from Compustat for the firms I'm interested in (variables prccd and cshoc).
However, for some firms, I get several values for both stock price and shares outstanding. Each row is labelled with separate ISINs.
For instance, for Volkswagen on Nov 1, 2016, I get
206205445 shares at 123.65 EUR under ISIN DE0007664039,
295089818 shares at 133.55 EUR under ISIN DE0007664005, and
1475449090 shares at 26.40 EUR under ISIN US9286623031.
Lastly, I found this document (see link) with a list of other Volkswagen ISINs.
Which stocks should I include in the summation to arrive at what's commonly referred to as market cap?
https://www.stichtingvolkswageninvestorsclaim.com/sites/default/files/vw_isin.pdf
To put it bluntly, you need to check the facts.
As per VW's website, DE0007664005 are ordinary (common) shares, while DE0007664039 are preferred shares: http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations/faqs.html
VW's common shares give voting rights, while the preferred shares do not. As far as I know this is the only difference between them. Both are entitles to pro rata dividend, etc. The common shares are rarely traded and not liquid (http://www.bloomberg.com/news/articles/2015-10-11/volkswagen-s-widening-stock-gap-reflects-concern-on-capital-plan).
While finance textbooks often omit preferred stock in market cap calculation, I would strongly suggest that you include both in your calculations of VW's market cap. In US parlance preferred shares usually denotes a debt-like instrument, which is why it's included in enterprise value, but not market cap. In VW's case preferred shares are actually the ones that are traded the most. You could compare them to Berkshire Hathaway's class B non-voting stock (BRK.B).
US9286623031 are ADRs, so disregard it completely. These certificates are simply shares repackaged for trading in the US. Including them in market cap would mean double-counting.
Thank you very much, Dawid - that was very helpful.
I'm looking at data for about 30 firms.
In this document (http://zeerovery.nl/blogfiles/Comp-IID.pdf) I learned that ADRs can be identified by Issue IDs of 90 and higher, so I could easily filter out those.
This left me with a handful of firms whose ISINs I now looked up manually, as you recommended. I also manually checked some of my calculated market cap values with those listed in annual reports/on financial portals and generally get good agreement.
ISIN is international securities identification Number, it is a unique number assigned to every security and for the same company there may be different types of securities available ( example : normal equity, preference equity, debt, etc etc).. so i would recommend you to choose the normal equity shares only.
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