Q: Hi
I have three questions.
I am confused about market cap of a stock. Let me illustrate by way of example.
Company X lists for the first time on a stock exchange. It sells a lot of shares and captures, maybe, a windfall. The money is used to grow the company. Without any rationale, the share price drops and drops until it is worth next to nothing. The company is still operating and generating profits. In theory, can the company operations not be oblivious to the drop in share prices, as long as it still has sell-able products or services and is generating profits? Or do the value of the share price affect the company's operations?
The other thing I'm confused about is the value of the assets, goods and services possessed by a company. Assuming the value of these assets was much greater than the market cap, it seems unfair that the market cap could be seriously skewed by at the whim of shareholders. I don't have any examples but I assume there are some.
Lastly, can you please compare Tesla to BYDDF and fundamental basis?
I have three questions.
I am confused about market cap of a stock. Let me illustrate by way of example.
Company X lists for the first time on a stock exchange. It sells a lot of shares and captures, maybe, a windfall. The money is used to grow the company. Without any rationale, the share price drops and drops until it is worth next to nothing. The company is still operating and generating profits. In theory, can the company operations not be oblivious to the drop in share prices, as long as it still has sell-able products or services and is generating profits? Or do the value of the share price affect the company's operations?
The other thing I'm confused about is the value of the assets, goods and services possessed by a company. Assuming the value of these assets was much greater than the market cap, it seems unfair that the market cap could be seriously skewed by at the whim of shareholders. I don't have any examples but I assume there are some.
Lastly, can you please compare Tesla to BYDDF and fundamental basis?