$5.5 billion melt away.
Worth remembering that the stock market, like a bank, is an abstraction mechanism for legitimizing "funny money".
Valuations increase/decrease "on the books" based on the the most current valuation of the last shares traded. But that does not mean that anyone could ever sell all shares for that price. This is never true.
Similarly, a bank takes deposits, then loans out all but a fraction of that money, the banking system as a whole takes more deposits based on this "new money" in circulation, all but a fraction of that "new money" is loaned out, etcetera, etcetera. But it is never possible to pay out anything but a small fraction.
When I look at these stocks, I think of them frequently in terms of how much has been paid for each independent share. Totaling that up over time gives you a more conservative valuation of the company. It can be estimated (kind of) by looking at total float, volume of the stock traded, and price of trade. |
