Tuesday, January 05, 2016 11:00:31 AM
Market cap is very misleading for an individual investor.
Example company. You brought stock into two companies and paid the same same price per share in each at the time you purchased.
Five years later both companies reach a market cap of a billion dollars.
Company A has a billion OS shares, while company B only has 10 million OS shares.
In which company did you make the most on your investment both with equal market caps.
The installation company is example A. Yes there will be constant growth but with constant dilution. The market cap will rise slow (relative to B) and steady the individual stock holder will see a slow steady rise in stock price.
The cell is company B. Market cap will rise with very little need of dilution for growth.
The individual share holder is much further ahead in the company's B business model.
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