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An honest question, why do people really care about the market capitalisation of a company?
by tehabe 8y ago
An honest question, why do people really care about the market capitalisation of a company?
- oculusthrift 8y agoit’s one number that’s easy to get understand.
- tehabe 8y agoeasier to understand than revenue?
- cakebrewery 8y agoBecause investing has become integral in personal finance and market cap gives an estimate of a company's value, room to grow, etc.
- kovek 8y agoI appreciate how you state that investing has become an internal part of personal finance. I agree with you, but unfortunately nobody taught us this where I am from.
- TheGRS 8y agoSame for me, other than tidbits I got from my parents occasionally. Like many of the important things I learned in life, I had to teach myself.
- tehabe 8y agoBut for investing the market cap is irrelevant, the stock price development is relevant, dividends are relevant, interests are relevant. There are a lot more indicators which are more relevant if you want to invest in a company or not than the market cap.
- Leary 8y agoThe trillion dollar mark is an artificial one for sure. But the market capitalization is a good proxy for the financial power of a company. It's basically what the market values the entire company to be worth. If an alien has $1 trillion dollars, it can theoretically buy Apple (if the shareholders are willing to sell, and if the US regulatory agencies would approve the acquisition.)