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The market cap, of course, is what the value of the company is in terms of stock value at the current price. The $20MM he paid for the technology could have been expensed against income as R&D cost or could have been capitalized (or carried as goodwill) and would have no influence on the stock price if the price was under book.

For example, if I own a company worth $10 million and tomorrow I pay $500K for the right to use "kmorley123" in my business, the valuation is still $10MM. I could put the asset on my balance sheet but it doesn't increase the market cap unless the market recognizes the value of what I bought and runs the stock up.
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