Comment by watutalkinbout
20 hours ago
Well, yes but not really.
I could buy a local sweetshop for a 100 billion dollars, just because I might do that, that doesn't mean it's actually worth that.
20 hours ago
Well, yes but not really.
I could buy a local sweetshop for a 100 billion dollars, just because I might do that, that doesn't mean it's actually worth that.
On the contrary, you would be demonstrating that, to at least one buyer, it was worth that. By definition.
I think the argument you’re really looking to contradict is this: if 1% of a company is worth $1B to somebody, then somebody would pay $100B for the whole company. That does not follow (and indeed the acquisition price of a company is almost never exactly its “market valuation”).
> and indeed the acquisition price of a company is almost never exactly its “market valuation”
The acquisition price is almost always significantly more than its market value. The reason is that if you start buying shares on the open market each transaction of yours will raise the stock price, and eventually you will price yourself out of the purchase.
So what buyers do is negotiate directly with the board and propose an inflated price that >50% of shareholders are okay with.
In some sense I would argue that it is the next highest bid that determine the worth. I.e. what the buyer could hope to resell for.
No.
You are assuming that the money that I buy the sweet shop for is what I evaluate the value of the sweet shop to be worth. That's not necessarily true.
You're also assuming I'm not insane.
If I offer to buy an apple from you for 1 trillion dollars because I believe consuming that specific apple will make me a god, that apple is not actually worth 1 trillion dollars.
Items don’t have an inherent “worth”.
If I have an apple and you agree to buy it for $1T, then the apple is indeed worth $1T at that moment.
After the purchase is complete it is worth ~$0, or whatever the next person is willing to pay you for it.
Alternatively you can say “it is still worth $1T to me” and that would be true as well.
When we are specifically talking about companies, their value is where buyers meet sellers in the order book.
3 replies →
Real world example: someone just bought the first Ferrari Luce EV for $40M. Obv $600K starting price for that model was low!
https://www.reuters.com/business/autos-transportation/ferrar...
Yes it's literally what it means. It was worth that to you (even if just to prove a point).
What else does worth mean?
Okay.
I buy a sweetshop for 1 billion dollars.
Now, immediately after I have bought it, what's it worth?
> Now, immediately after I have bought it, what's it worth?
Is a buyer asking to buy it? If yes, whatever you sell it for.
If no, then you really have no idea what it's worth now, all you know is it was worth 1B to you when you bought it.
What the next person would buy it for. Maybe you buy it for the memes but it doesn't mean another would afterwards.
5 replies →
and just what the fuck is ""worth"" anyway