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Shopify's market cap is $146 billion, so any acquisition would certainly be them buying.
by pavlov 6y ago
Shopify's market cap is $146 billion, so any acquisition would certainly be them buying.
- mcny 6y ago> Shopify's market cap is $146 billion, so any acquisition would certainly be them buying. Not that I know anything about this specific instance but the story can be... complicated. For example, would you say CenturyLink acquired Level 3 or did Level 3 subsume CenturyLink? If you read the news headline, you'd probably say CenturyLink bought Level 3. > https://archive.fo/rdNYn https://archive.fo/rdNYn > CenturyLink to acquire Level 3 for $34 billion > Telecommunications company CenturyLink is upgrading its network with the acquisition of Internet backbone provider Level 3 Communications in a deal valued at $34 billion. > In the cash and stock transaction, Level 3 shareholders will get $26.50 and 1.4286 shares of CenturyLink stock for each share of Level 3 stock. At $66.50 per Level 3 share, that represents a premium of about 42% over Level 3 closing share price of $46.92 on Oct. 26. Included debt brings the deal to $34 billion, the companies said. > When the transaction closes, expected by the third quarter of 2017, CenturyLink shareholders will own about 51% of the combined company, with Level 3 shareholders owning about 49%. However, the new CenturyLink/Lumen CEO is the Level 3 CEO. > Jeffrey K. Storey (born May 12, 1960) is an American business executive whose career has focused on the telecommunications industry. He was the president and chief executive officer of Level 3 Communications between April 11, 2013, and the company's acquisition by CenturyLink in 2017, at which point he became president and COO of the combined company. He became CEO of CenturyLink on June 1, 2018.
- whoisjuan 6y agoShopify is indeed a way larger company operationally speaking. But one interesting thing about market caps is that they are not correlated with present operational value. There are companies with large market caps that have small cash reserves and no structural access to large debt. In contrast there also companies with smaller market caps that have large cash reserves, established lines of credit and perhaps other instruments to leverage debt. Wall Street is surprisingly bad at valuing those things (or maybe surprisingly good?). People want to trade stocks that have unrealized value. That's why solid stocks like VZ and T barely can keep up with the S&P 500 growth. They are seen as companies with fully realized value. There's not too much for those companies to do besides solidifying their monopolies.