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no2koolaid

09/22/22 12:47 PM

#516010 RE: Poor Man - #516000

Actually, I’m just illustrating a point.



As was I...

Generally speaking, the investment community uses market cap as a viable way to determine a company’s size. The "market cap as value" is the big mistake that people and investors make in assuming that whatever the market is charging for a company, that is what it’s worth. It is why we see acquisitions that are a multiple of the share price at the time the deal is announced. It is what the acquirer believes they can do to create value. Some of it comes from synergies that reduce the operating costs upon integration and some from the ability of a firm to better monetize assets.