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Comment by VirusNewbie | Hacker News Reader

It's amazing that you're the third person on this thread to not understand what market cap is.

Market cap refers to size. The comment you are replying to is talking about size

You're confused. It refers to the price of all available shares. We don't say "The size of Meta shrunk in one day by 20%" because the share price fluctuated. That would be retarded. No one refers to the 'size' of a company is referring to market cap.

> No one refers to the 'size' of a company is referring to market cap.

Saying a company is "the largest by market cap" is very common. Just saying "largest" on its own is ambiguous. "Largest by revenue" is also very common.

"Biggest by market cap" -- https://www.investopedia.com/biggest-companies-in-the-world-...

"Microsoft is the largest company in the world, with a market cap of $3.13 trillion." -- https://www.fool.com/research/largest-companies-by-market-ca...

I think "large" usually means revenue, but it can mean market cap too.

Your presumtion of others' inability to understand is making you confused. No one said market cap equals size of a company. But market cap does measure financial power if we talk about percentage of shares owned. Anyway no single private entity should have that amount of market cap.

“medo-bear 2 hours ago | parent | next [–]

Market cap refers to size“

Short term memory isn’t great?

Market cap refers to size. Whats confusing you ?

> No one refers to the 'size' of a company is referring to market cap

Market cap is certainly used to evaluate the size of a company.

https://www.investopedia.com/terms/m/marketcapitalization.as...

Nothing in the linked article says anything about market cap representing the “size” of a company. It talks about typical market caps of various size companies, but it never claimed it was bidirectional relationship. It seems you just googled market can and size and decided to link it. Unbelievable.

The article lists it as one of 3 key takeaways:

    Market cap is used to determine a company's size, and then compare the company's financial performance to other companies of various sizes.

But it doesn’t actually say that in the article

Maybe this will help you: https://abc.duolingo.com/

Market cap refers to perceived value to shareholders as measured by the stock price, which may or may not have anything to do with the size of the company or the amount of profit that it's making.

But having a large market cap necessarily gives a company a large amount of influence and power because they can sell stock to buy things.

This is not how it works at all. Companies do not sell stock except in specific circumstances that are tightly regulated. Often they don't sell stock at all once they're public, because that increases the number of shares outstanding, causing the share value to drop, something investors generally do not like. I don't know the last time Google sold stock, but it would have been long ago because you only need to do this when you want to raise cash that you cannot get through operations, and Google has had billions of dollars in the bank for many years now.

Publicly traded companies create new stock, constantly, in the form of RSUs.

It is true that they aren’t technically selling the stock, they’re diluting existing stock and then using the created stock as compensation, but this seems like an unimportant distinction.

This does grant the company some power. Not obvious to me that power is nefarious, but it’s quite real.

The stock they use for this is not created constantly, it's created in a block set aside for that purpose by board action. Companies do this relatively infrequently.

Some companies sell stock regularly and all the big tech ones constantly use it as payment for employees.

If this were true, Tesla would be (almost two times) ‘bigger’ than any other automaker, but it actually has less than one third the revenue of Toyota. By what measure is TSLA bigger than Toyota?

Market cap obviously /s

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