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Re: gunnabeoneday post# 19335

Thursday, 11/25/2004 12:51:26 PM

Thursday, November 25, 2004 12:51:26 PM

Post# of 82595
gunnabe, With all due respect, I am only presenting the defenition of 'market cap'.

Market cap is the number of shares times the pps.

The cap and the pps are inextricably linked to each other and neither can change without a corresponding change in the other.

While the value of the company can rise and fall as the market perception changes over time due to revenues or other factors, that value will always be reflected in both the pps and the cap at the same time.

To suggest that an increase in shares could occur without a decrease in pps but at exactly the same time as an offsetting increase in value that would maintain the existing pps strains credibility to the limit.

The market cap is NOT static over time and never will be. [Let's hope, lol]. The declining value of the cap over the last few months is indicative of such. It is falling much faster than it should be, based on just the dilutive effects of the LaJolla deal. There are clearly other factors that are influencing the company's value. However, at any given instant in time, an increase in shares will result in a proportional decrease in pps. The ONLY way to offset that decrease is for there to be a corresponding INCREASE in the value of the company.

I don't know why you shy away from the concept that the value of the company HAS to increase in order to complete the deal. Furthermore that increase in value MUST end up reflected in the pps. There is no other way.

regards,
frog

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