3 ms·
Conflating market cap and total worth is a pet peeve of mine. Market cap is "price of one share" multiplied by the total number of shares outstanding. If you
by bbayles 9y ago
Conflating market cap and total worth is a pet peeve of mine.
Market cap is "price of one share" multiplied by the total number of shares outstanding.
If you want to buy a small number of shares, you can probably just multiply to find the total price you would pay.
If you want to buy a large number of shares, or the whole company, you can't just multiply. You would need to get the current owners to sell to you, and they might either charge you a premium or refuse to sell. The total worth of a company depends on the distribution and type of ownership (among many other things).
Market cap is a fine shorthand, but serious analysis about comparing worth should control for several other things.