Market Cap Company Valuation with Market Capitalization
It is very important to understand that price is not necessarily the value of a company.
Price is what you pay for something, but value is what you get.
Let’s say you go out and buy a new Maserati, we’ll say that the value of the car is $100,000. If I paid $200,000 dollars for the car, it doesn’t mean that it’s worth $200,000. That’s just what I paid for the car. I massively overpaid for it.
Now, on the other hand, if I paid $50,000 for it, it also doesn’t mean that it’s worth $50,000. That’s just what I paid.