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Large companies have a ton of “cash” — but it’s not really cash, it’s parked in equities of other companies. If the whole market goes down and those equities ar
by pb7 4y ago
Large companies have a ton of “cash” — but it’s not really cash, it’s parked in equities of other companies. If the whole market goes down and those equities are worth less, yes, the company is less valuable overall so market cap should be lowered but is it indicative of the company’s success as a business?
- anikom15 4y agoI would say so, because part of a company’s business is choosing what to invest its cash in. If a company is making bad investments (or viewed as bad in the current market), then that should reflect in its price, and reporting that information helps catalyze that.