In article <91tcq5xpr6.ln2@xxxxxxxxxxxxxxxxxx>,
Jerry McBride <jmcbride@xxxxxxxxxx> wrote:
> Roy Schestowitz wrote:
>
> > Microsoft loses 90 Billion Dollars
> >
> > http://slated.org/microsoft_loses_90_billion_dollars
> >
>
>
> How can you LOSE 90 Billion Dollars and stay in business or keep your
> investors buying your stock??? Amazing!
The same way Apple lost 50 billion in the last couple of months, and IBM
lost about 20 billion--in other words, they didn't.
Note it's a link by Roy to [H]omer's site, so you can almost guarantee
that if you dig slightly deeper, you'll find they story is not what they
say.
In particular, if you check Microsoft stock, you'll find that about four
months before that 90 billion "loss", the stock shot way up,
representing about a 90 billion dollar "gain". But in Roy/Homer Land,
stock gains don't count. So, if the stock shoots up $90 billion, then
goes back down $90 billion, they ignore the former.
They also ignore the fact that a market cap change, to the extent it
represents a gain or loss, is a gain and loss to the stockholders, not
the company.
To put it in terms that might be more familiar to the average person,
suppose you buy a house for $250 thousand. On rumor that a major
development is going to take place in your area, housing prices shoot
up. Your house reaches a market value of $350 thousand. You've now
"gained" $100 thousand! Yipee!
Then, a couple months latter, the news breaks that the development is
not going to happen. Your house drops back to $250 thousand. You've
now "lost" $100 thousand.
Note that through that whole gain and loss, you income would have
remained the same, you bills the same, you bank account the same. All
that happened is that your worth on paper when up and then went down.
--
--Tim Smith
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