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To: Lazamataz
wiping over a trillion dollars in assets

Why do people regard "market capitalization" as a number that means something? If a company sells 100,000 shares at $10 each, someone sells 100 of those shares for $100 each, and that's the last trade of the day, the company's "market capitalization" is $10,000,000 (100,000 shares times $100/share) even though investors only put $1,000,000 into the company. There is also no way that investors, on a whole, could get anything close to $10,000,000 out of the company (some might get more, but only if others lose money). What, then, is the meaning of the $10,000,000 "market capitalization" figure?

7 posted on 07/28/2002 6:37:14 PM PDT by supercat
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To: supercat
"What, then, is the meaning of the $10,000,000 'market capitalization' figure?"

It is neither less nor more meaningful than folks' 401(k) balances. They couldn't all cash-out and expect to get the dollar figure in their quarterly statement.

16 posted on 07/28/2002 6:51:07 PM PDT by Tauzero
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