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if there are 100 shares in a company, but 2 people own them. person1 has 99 shares. person2 has 1 share. person1 sells their share for $100 to person3. Does th
by itake 2y ago
if there are 100 shares in a company, but 2 people own them. person1 has 99 shares. person2 has 1 share. person1 sells their share for $100 to person3.
Does that mean the market cap is worth $10k? yes. is that meaningful if there are no other buyers at $100? no.
- lIl-IIIl 2y agoNot sure how this applies bere. It's a publicly traded company, so the price is literally what the in buyers are willing to pay.
- itake 2y agoJust because it’s publicly traded doesn’t change anything. There might be no buyers. There might be no buyers willing to buy at the last sold price. There might be no sellers willing to sell at the last sold price. Market cap would be $10,000, but if there isn’t a single person willing to buy for that price, then is it worth that much,
- kortilla 2y agoOf course it changes it. The market cap you see is based on up to date trade clearing prices.
- HDThoreaun 2y agoNvidia is liquid, you dont have to worry about the stock having no buyers.
- Ekaros 2y agoAlso diversified in ownership. Huang is at less than 4%, big institutions are also at less than 10%. So good chunk of the stock should be some level of liquidity at reasonable premium.
- ummonk 2y agoIt’s a publicly traded company with very high liquidity (tens of billions being traded each day). The market cap is based on the price that other buyers and sellers are bidding. This hypothetical of there being no other buyers simply doesn’t apply.
- aurareturn 2y agoLuckily, Nvidia has no such liquidity issues given that it's the most traded stock in the world. https://finance.yahoo.com/markets/stocks/most-active/ https://finance.yahoo.com/markets/stocks/most-active/ So yes, Nvidia's market cap is meaningful. If the reported market cap is at $3.5t and you want to sell your shares, you can easily find someone else who values Nvidia at $3.5t to buy them.