Explaining How Market Cap Really Works: A $100 Purchase Can Change a Market Cap by $1 Million, While a $1 Million Purchase Could Fail to Move a Market Cap by a PennyDispelling a common misconception: market cap does NOT represent the net cash inflow into an asset. A $100 purchase can change a market cap by $1 million, while a $1 million purchase could fail to move a market cap by a penny. Here is how it actually works.
Hello everyone! I wanted to take a moment to dispel a common misconception about market cap. Many people think that market cap is a representation of the net cash inflow into an asset, but this is not the case. A $100 purchase can change a market cap by $1 million, while a $1 million purchase … Read more