Which is fine and dandy until the gold miners realize that they aren’t going to find enough gold to make it worthwhile and stop buying shovels and the market value of your company depends on your ability to continue selling shovels. Twenty five years after the dot com bubble burst, shovel seller Cisco is only just now reaching the same stock price they peaked at in early April of 2000.
Market cap is just share price times the number of shares. Can potentially be completely divorced from how well your company is actually doing. Conversely, a drop or rise in market cap doesn’t have to mean your company is doing better or worse. If you’re selling shovels, you still have the money when the music stops.
Which is fine and dandy until the gold miners realize that they aren’t going to find enough gold to make it worthwhile and stop buying shovels and the market value of your company depends on your ability to continue selling shovels. Twenty five years after the dot com bubble burst, shovel seller Cisco is only just now reaching the same stock price they peaked at in early April of 2000.
Market cap is just share price times the number of shares. Can potentially be completely divorced from how well your company is actually doing. Conversely, a drop or rise in market cap doesn’t have to mean your company is doing better or worse. If you’re selling shovels, you still have the money when the music stops.