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Message: Re: A what if scenario... Market Cap
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Feb 24, 2011 01:05PM
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Feb 24, 2011 01:41PM
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Feb 24, 2011 01:54PM
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Feb 24, 2011 02:51PM
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Feb 24, 2011 05:04PM

'So I think it is simplistic to say 'Market Cap means everything' and that a higher cap is indicative of strength... or time to buy... or that this stock is a sure fire winner.'

Snug, sorry but that doesn't make sense to me. It most definitely isn't the message I was attempting to convey.

'Market cap' is a fancy term used for what the company's present day value is. It is 'shares outstanding x share price = market cap'. End of story.

I am concerned that some investors only look at the share price and do not consider how many shares are outstanding. You cannot evaluate the value of a stock without considering both. If GNH had 100 Billion shares outstanding then I would say that we would be overvalued at 26.5 cents (as GNH would be worth 26.5 Billion!). Conversely if GNH had only 100,000 shares outstanding, I would say we were undervalued (GNH would be worth $26,500).

A higher cap doesn't mean there is strength or weakness.

GNH is presently valued at approximately $37.9M going by todays stock price. That would be the number I would use to find comparables to determine we are over or undervalued. Not the share price.

Sorry if I've misunderstood your post,

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