Bernardus Smith @BernardusJS: "𝗪𝗵𝗮𝘁 𝗜𝘀 𝗮 𝗦𝘁𝗼𝗰𝗸 𝗥𝗲𝗮𝗹𝗹𝘆..."

Luxembourg

𝗪𝗵𝗮𝘁 𝗜𝘀 𝗮 𝗦𝘁𝗼𝗰𝗸 𝗥𝗲𝗮𝗹𝗹𝘆 𝗪𝗼𝗿𝘁𝗵? Let’s say someone offers to buy a single share of a company for $100. Someone else who owns this share is willing to accept this $100 in exchange for the share. We now have supply and demand. If the company has 100 shares, the market cap (theoretical value if every share were priced at $100) after this transaction is $100 X 100 shares = $10,000.00. If the company has 10 billion shares, the market cap after the transaction is $100 X 10 Billion shares = $1 Trillion. Revenue, profit, assets, liabilities - none of this has to change for a company’s value to go from $1 to $1 Trillion. So we can conclude that value is driven purely by perception. Because the stock market is accessible to almost anyone with access to the internet, this perception tends to lean much more towards “feelings” than “facts”. In other words, a shoe company like $BIRD (Smartbird Inc) mentions a pivot towards AI and the stock jumps 1,000% in a day. A company which has managed to halve its revenue in the last 3 years with a net loss equal to 35% of revenue. $GOOG (Alphabet) $NVDA (NVIDIA Corporation) $TSLA (Tesla Motors, Inc.) 𝗗𝗼𝗲𝘀 𝗺𝗮𝗿𝗸𝗲𝘁 𝗰𝗮𝗽 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗺𝗲𝗮𝗻 𝗮𝗻𝘆𝘁𝗵𝗶𝗻𝗴?

Not investment advice. The author may have financial interests in the mentioned instruments.

No one cares about Market Cap

100.00%

Yes, reflects fundamentals

100.00%

Other - comment below

100.00%