Take a look at the concept of EV (Enterprise Value). http://www.investopedia.com/terms/e/enterprisevalue.asp http://www.investopedia.com/terms/e/enterprisevalu

Take a look at the concept of EV (Enterprise Value). http://www.investopedia.com/terms/e/enterprisevalue.asp http://www.investopedia.com/terms/e/enterprisevalue.asp It explains my perspective. As a thought exercise, what is the relevant "price" to acquire a company when the share price has fallen to zero (just before bankruptcy)? Free is the wrong answer. How much does it cost to acquire a lemonade stand with $1B in the bank, and a market cap of 1.000001B? Enterprise value will give an accurate "price" in both of these examples.