It seems many folks mistakenly believe that "market cap" represents how much money went into something, or how much value something has. For an illiquid asset that involves insider trading, "market cap" is an entirely made-up number.
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If an asset has a $1B market cap, it doesn't need $500M worth of capital exiting the asset in order to crash by 50%. That could potentially happen with under $1M of outflow. And conversely on the way up: a $1B market cap doesn't mean people have spent $1B purchasing the asset.
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I genuinely don’t get that, and can’t work out if I’ve missed the point? You’ve spent 1k on 1 asset, but the total mkap should be 1k, as the other assets remain unsold?
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I think the argument is: market cap is not a true reflection of total company value as it is a measured using outstanding shares rather than floating stock, where floating stock excludes shares held by company insiders or controlling investors.
End of conversation
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