LYC Mispricing Article, page-19

We are splitting hairs but I have no problem with Market Cap on a diluted basis provided it is clearly shown it is. Which in the article concerned it was not.

Having said that since Adam made his 1st investment in the Garden of Eden Exchange (GEX) market cap has always been mc= n x p where n = the number of shares outstanding and p is the price. To include non issued shares is misleading because in a perfectly valued company the price per share will change if you issue more shares without any upward corresponding movement in earnings. Hence it is incorrect to show market cap on a fully diluted basis because you don't know what the share price would be. I would argue strongly if you issue 20% more shares then the price per share should drop by 20% provided everything else is unchanged.

It is however of vital importance in any valuation of a company to understand the dilution that will occur going forward from shares coming out of escrow, transfer of debt to equity etc. But we are not arguing this.

Anyway onward and upward - so long as the SP keeps on rising I dont think it really matters. Getting happier by the hour .