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interesting adjective "most valuable." To many that equates to revenue generated, to others profitability. Haven't read this article but starred for later I'm c
by BorisMelnik 11y ago
interesting adjective "most valuable." To many that equates to revenue generated, to others profitability. Haven't read this article but starred for later I'm curious to see what it says.
- glibgil 11y agoYou might just star this thread for later commenting too
- gist 11y agoThe core, at least to me, of his comment was: "To many that equates to revenue generated, to others profitability" He happened to add that he would read the article which is why I am guessing as of when I viewed the comment it was heavily downvoted. The heavy handed downvoting is what I don't like about HN so quick to jump and assume there is no value in the comment. There was. Although I know the definition for sure there are "many" people who would read "most valuable" and not know the true definition. [1] [1] My point being there is value in the observation of people who aren't clued in to that fact.
- kirian 11y agoIt's talking about Market Cap.
- ghayes 11y agoYes, which is basically how much someone would pay to own the company today = discounted expected long-term profits.
- kidfire 11y agoNot at all true. Most obvious reason being control premium (which applies to all buyers, but lot of other reasons why price paid by a buyer would be different, for example expected synergies) Really just share price x shares outstanding - by one valuation method, share price in theory is driven by expected present value of future dividend stream, but even this is also very different from what you said (company's actual cash flow)
- deleted 11y ago[deleted]
- deleted 11y ago[deleted]
- jbigelow76 11y agoIn this context it's solely about market cap. Alphabet's market cap is currently at $570 bln to Apple's $535 bln.
- lambda 11y agoWhen talking about a publicly traded company, "most valuable" generally means "market cap", and indeed, that's what it means in this case.
- sickrumbear 11y agoI don't see the value in commenting if you haven't read the article yet. company value in most cases is based on market cap (stock price x shares outstanding). It'd be more constructive to read and then ask any questions you might have!
- jdmichal 11y agoFor public companies this is always going to mean market capitalization, which is the number of outstanding shares multiplied by the share price. This is the amount that would be required to instantaneously buy all the stock were it for sale at the listed price and thereby gain 100% ownership. (In reality this never happens, and quickly buying large amounts of a stock typically elicits an additional premium on top of the list price. Buyouts of public companies tend to be for a significant percentage higher than the listed price.) So the market cap is in a way, quite literally, the valuation of the company. EDIT: Italicized additions. Thanks for the feedback.
- danharaj 11y agoIt's definitely not the amount of money that would be required to buy all the stock. The market cap is usually much smaller than that quantity.
- dragonwriter 11y agoWhich is fairly easily demonstrated by the fact that actual acquisitions of going concerns are usually at a premium above the market price at the time they are negotiated.
- gertef 11y ago> This is the amount that would be required to buy all the stock and thereby gain 100% ownership. This is not true. Stock price is marginal price of a share -- the point at which all sellers are askin more than all buyers are accepting, not the price that every share would sell for.
- Mikeb85 11y agoMost valuable = highest valuation.