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Market capitalization is based purely on the value of the stock itself and doesn't take into account any other factors such as projections, profitability or deb
by weare138 6y ago
Market capitalization is based purely on the value of the stock itself and doesn't take into account any other factors such as projections, profitability or debt. It's an odd way to value a company in my opinion and just leads to inevitable debacles like WeWork.
https://www.investopedia.com/terms/m/marketcapitalization.asp https://www.investopedia.com/terms/m/marketcapitalization.as...
- simonebrunozzi 6y ago> Market capitalization is based purely on the value of the stock itself > doesn't take into account any other factors such as projections, profitability or debt You seem to confuse a few things here. Explain how Amazon could ever be worth more than zero for most of its existence, then? Price of stock is largely dependent on people willing to buy it and sell it. When more people want to buy it, the stock price generally goes up. Why do people want to buy more than sell? Generally, it's when they think the future price will be higher. Projections, sort of.