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The number of shares only matters in so much as (Number of shares) x (Share price) = (Company valuation) Implicitly, if investors take the view that Square is
by jackgavigan 11y ago
The number of shares only matters in so much as
(Number of shares) x (Share price) = (Company valuation)
Implicitly, if investors take the view that Square is worth a certain amount, then increasing the number of shares will reduce the value of each share.
The shares Square will be issuing to its Series E investors are designed to increase the proportion of the company that they own so that, even though the pie is smaller, their piece of the pie remains a certain size. In principle, everyone else's share of the pie is, therefore, smaller and less valuable as a result.
- jackgavigan 11y agoAs recently as September, the company [Square] handed out stock options to staff — one of the main perks of jobs in the Valley — valuing it at $15.39 a share, or more than 50 per cent above what the shares were deemed to be worth only six months earlier. But less than two months later, a more sombre picture is sinking in. Square’s assessment of what its shares are now worth is closer to $12 each. Source: http://www.ft.com/cms/s/0/6ad992e6-8792-11e5-9f8c-a8d619fa707c.html http://www.ft.com/cms/s/0/6ad992e6-8792-11e5-9f8c-a8d619fa70...