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Can somebody explain how Amazon could buy them if Capital One's total assests are worth $334 billion? Presumably the valuation would be some multiple of that. A
by kevinstubbs 10y ago
Can somebody explain how Amazon could buy them if Capital One's total assests are worth $334 billion? Presumably the valuation would be some multiple of that. Amazon doesn't have enough liquid cash, so how would they do it?
- JacobJans 10y agoCapital One's current market cap is around $44 Billion. They may have $334 billion in assets, but its not their money. It's their customer's. By comparison, Amazon's market cap is around $400 billion. Ironically, they both seem to make around the same amount of money.
- fny 10y agoAmazon heavily reinvests the money it makes, unlike Capital One, which pays dividends to shareholders quarterly.
- deleted 10y ago[deleted]
- geodel 10y agoI would imagine it is asset under management. May be something like hedge funds which have 100s billion dollar assets but that is money of clients not the value of hedge fund.
- antimora 10y agoProbably a combination of asset merging and cash pay out.
- GauntletWizard 10y agoYou've raised like five questions in three sentences, so here's the low down: Capital One isn't worth $334B. It manages assets worth $334B. Those are the totals of the deposits creditors have with it. Capital One is worth $44B as of this writing[1]. Many companies have fixed capital assets worth less than the company, because they've financed those assets with debt, which would have to be acquired or repaid at the time of the company's sale. Some companies have close to no fixed assets but are worth much from their prestige or ability to execute. Some companies have secondary liabilities that are worth much more than their assets - See Yahoo, who were at one point worth less than the valuation of their holding in Alibaba. Buyouts are rarely done in cash. They're often done in financing, with several banks lending money to the company to cover the total purchase price. They're also frequently done in stock, where the buying company gives the acquired company shares in the buyer equal to the value of the acquired - Either by issuing new stock, or by simply buying up the old, or some combination of the two. [1]https://www.google.com/finance?q=NYSE:COF https://www.google.com/finance?q=NYSE:COF
- jerf 10y agoBuying Capital One with Amazon stock would probably be an appealing proposition to Capital One stock holders: http://finance.yahoo.com/chart/AMZN#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%3D http://finance.yahoo.com/chart/AMZN#eyJjb21wYXJpc29ucyI6IkNP...
- kevinstubbs 10y agoThanks for the information. This opens a little rabbit hole of terms to crawl Wikipedia for. It's very interesting that you thought I raised five questions, when my intention was to actually clarify my single question :)
- tvmalsv 10y agoMaybe they could get a favorable rate from Capital One ;) Would it even be legal for a bank to finance the purchase of themselves?