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Wrong. https://www.investopedia.com/terms/m/marketvalue.asp https://www.investopedia.com/terms/m/marketvalue.asp Market value definition: > obtained by multi

Wrong. https://www.investopedia.com/terms/m/marketvalue.asp https://www.investopedia.com/terms/m/marketvalue.asp Market value definition: > obtained by multiplying the number of its outstanding shares by the current share price The reality of selling has nothing to do with it. It's just a math equation.

brndnmtthws 9y ago
How can a thing which never existed to begin with vanish? There wasn't $100B sitting around in a bank account waiting to be claimed, which then suddenly evaporated. Also investopedia isn't exactly a high quality source.
- DennisP 9y ago
  It's not only dollars that have value. Lots of assets do, like company shares. In the stock market, if a company has ten million shares at $100 each we say the company is worth a billion dollars, even though that $100 price is only the most recent transaction. We say that because if price times quantity didn't match what the overall market thinks the whole company is worth, the price would quickly correct until it did.
- jawilson2 9y ago
  What about the Financial Times? http://lexicon.ft.com/Term?term=market-capitalisation http://lexicon.ft.com/Term?term=market-capitalisation "Market capitalisation or market cap is the market value of a company's issued share capital – in other words. the number of shares multiplied by the current price of those shares on the stock market."
- everdev 9y ago
  $100B was created on paper and lost on paper. Net worth is the same concept. Jeff Bezos net worth is calculated based on how much his assets are theoretically worth based on current fair market prices. He doesn't have to sell all his assets to determine his net worth. People don't like the "lost $100B in market value" part, but it is accurate since market value is calculated on paper.
module0000 9y ago
Investopedia should not be your source of truth. While you can get quality education for free on the internet in various subjects(math, CS, biology) - financial markets is not one of them. Market value is exactly what the parent asserted it is, and the source of truth for that is your bank. If you are long 500k shares of AAPL and the quote is $100 - your bank will not consider you to have $50mil liquid assets. They know(and you should to) that starting to unwind a position of that size will decrease the market value a considerable amount. Maybe an example will help you out here.... Let's walk through that AAPL example. You are sitting on 500k shares. Step 1: Order 100,000 shares sold at market. Step 2: Observe your average sale price is more likely to be $90-95 than $100. Step 3: Order another 100,000 shares sold at market. Step 4: Observe your average sale price is more likely $90-91 than $90-95. Steps after this: same result, diminishing prices resultant from your sale(s). See a trend here? The market value of your assets is decreasing based on the market's perception of value, not on the mechanical formula investopedia fed you. Your unloading of shares is going to decrease the perceived value, which decreases the price you can sell them for. tldr; investopedia's advice on markets is barely more accurate than urban dictionary's advice on word meaning.
- notyourday 9y ago
  AAPL 500k shares? Yeah, not correct. AAPL average 50 day daily volume is slightly less than 28 million. Sell Day 500k AAPL bid - 0.001 SHOW QTY 100 won't move a market at all.
  - module0000 9y ago
    It's an example, the price being $100(nice round number) being a bigger fudge than the quantity.
- everdev 9y ago
  No, market value is the name of a math formula. It sounds like you're asserting that market value != Real world value which is true but irrelevant to the definition of market value. So as crazy as it sounds $100B in market value can be erased by a drop in the market price of an asset. But don't confuse that with $100B actually being lost or investors realizing $100B in losses. But in any event the title of the article is accurate.

brndnmtthws 9y ago

How can a thing which never existed to begin with vanish? There wasn't $100B sitting around in a bank account waiting to be claimed, which then suddenly evaporated. Also investopedia isn't exactly a high quality source.

DennisP 9y ago
It's not only dollars that have value. Lots of assets do, like company shares. In the stock market, if a company has ten million shares at $100 each we say the company is worth a billion dollars, even though that $100 price is only the most recent transaction. We say that because if price times quantity didn't match what the overall market thinks the whole company is worth, the price would quickly correct until it did.
jawilson2 9y ago
What about the Financial Times? http://lexicon.ft.com/Term?term=market-capitalisation http://lexicon.ft.com/Term?term=market-capitalisation "Market capitalisation or market cap is the market value of a company's issued share capital – in other words. the number of shares multiplied by the current price of those shares on the stock market."
everdev 9y ago
$100B was created on paper and lost on paper. Net worth is the same concept. Jeff Bezos net worth is calculated based on how much his assets are theoretically worth based on current fair market prices. He doesn't have to sell all his assets to determine his net worth. People don't like the "lost $100B in market value" part, but it is accurate since market value is calculated on paper.

module0000 9y ago

Investopedia should not be your source of truth. While you can get quality education for free on the internet in various subjects(math, CS, biology) - financial markets is not one of them. Market value is exactly what the parent asserted it is, and the source of truth for that is your bank. If you are long 500k shares of AAPL and the quote is $100 - your bank will not consider you to have $50mil liquid assets. They know(and you should to) that starting to unwind a position of that size will decrease the market value a considerable amount. Maybe an example will help you out here.... Let's walk through that AAPL example. You are sitting on 500k shares. Step 1: Order 100,000 shares sold at market. Step 2: Observe your average sale price is more likely to be $90-95 than $100. Step 3: Order another 100,000 shares sold at market. Step 4: Observe your average sale price is more likely $90-91 than $90-95. Steps after this: same result, diminishing prices resultant from your sale(s). See a trend here? The market value of your assets is decreasing based on the market's perception of value, not on the mechanical formula investopedia fed you. Your unloading of shares is going to decrease the perceived value, which decreases the price you can sell them for. tldr; investopedia's advice on markets is barely more accurate than urban dictionary's advice on word meaning.

notyourday 9y ago
AAPL 500k shares? Yeah, not correct. AAPL average 50 day daily volume is slightly less than 28 million. Sell Day 500k AAPL bid - 0.001 SHOW QTY 100 won't move a market at all.
- module0000 9y ago
  It's an example, the price being $100(nice round number) being a bigger fudge than the quantity.
everdev 9y ago
No, market value is the name of a math formula. It sounds like you're asserting that market value != Real world value which is true but irrelevant to the definition of market value. So as crazy as it sounds $100B in market value can be erased by a drop in the market price of an asset. But don't confuse that with $100B actually being lost or investors realizing $100B in losses. But in any event the title of the article is accurate.