[ds]

Hogwash. The worth of a company is what someone will pay for it. Thats literally the definition of the market cap. Trying to say "But these shares are overvalued right now!" means nothing. The value of anything is what someone will pay for it- Just ask the guy walking in the desert what he will pay for a bottle of water.

[jerf]

The worth of the company is what someone will pay for it, although that gets fuzzy when "what someone will pay for it" is rather more than one person or non-governmental entity could raise, but there's no particular reason the market cap is that number. If someone makes a serious offer on a company, i.e., tries to buy all the stock, the stock price usually significantly rises. It has to; to pry the stock out of other people's hands you can't simply offer the market price, or they'd already have sold, so you can't just buy stock at the "market price" (as unaffected by your attempt to buy the company) and end up with all of it. Contrariwise, if someone owns a lot of stock and decides to just dump it all for cash, they won't get the market cap either, because the very act of dumping the stock will cause the price to go down, possibly even crash. So, the "market capitalization" is a "price" that you can neither buy, nor sell, the company for or at... so... it also can't be what "someone will pay for it", or, it isn't a "price" at all.

[lotsofpulp]

If you read the investopedia link, you would see that what you write is not true. Just because some shares are being sold at a certain price does not mean all shares will be sold at that price.

>Although it measures the cost of buying all of a company's shares, the market cap does not determine the amount the company would cost to acquire in a merger transaction. A better method of calculating the price of acquiring a business outright is the enterprise value.

[EliRivers]

Thats literally the definition of the market cap.

It literally isn't. Market cap is literally the current share price multiplied by the number of shares outstanding. It's literally a different thing.

[AviationAtom]

Did you guys read the part of the article taking about their revenue increases? It isn't just stock price going up. As mentioned too, paying out a dividend means the company has a good revenue stream.

Apple's failure to innovate was Microsoft's opportunity to surge ahead.

[parrellel]

That's the value of the stocks, what does it have to do with the objective value of the company, its assets, its IP, its facilities. Entirely different critter.