calm before the storm , page-12

1invstor

I suggest you re-read post by flee (copied below). I haven't checked flee's figures re number of shares on issue for the 2 companies but the point is that, when valuing a stock, you must always consider (and compare) the market capitalization of the company (market cap = no. of shares issued x share price). so the number of shares on issue is equally important as the share price.

If you're not mathematically driven, think of market cap like a pie and a company's shares like slices of that pie. Now a pie of a given size could be cut into 12 small slices or 4 big slices. the value (and associated price) would be more for the big slices but the total value (and price) of the whole pie is the same. And so it follows with a company's shares. the number of shares on issue is set by the company and the market then determines the share price based on the punters estimations of the total value (market cap) of the company.

Hope this helps ...

K






"It isn't as simple as comparing share prices. You need to look at the market cap and number of shares on issue.

Lynas has a market cap of ~A$3.2b and ~1.6b shares on issue.

Molycorp has a market cap of ~US$3.5b and ~82m shares on issue."