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"It suggests the market is no longer performing its intended function of allocating capital to those companies that will use it most efficiently." Please expla
by djoldman 14y ago
"It suggests the market is no longer performing its intended function of allocating capital to those companies that will use it most efficiently."
Please explain how the trading of a company's stock changes that company's capital allocation.
- lmm 14y agoA company's market capitialization is its capital allocation. It's reasonably common for companies to use their own stock when making big buys (such as other companies).