Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.