Economy

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$1.15 trillion was wiped out from the US stock market today. (feddit.uk)

submitted 4 months ago by sirico@feddit.uk to c/economy@lemmy.world

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[–] tired_n_bored@lemmy.world 77 points 4 months ago (1 children)

I don't think it's entirely true:

Let's suppose there are 500shares trading at $10. The market capitalization is 5000$.

One person now trades one share for 9$. There are still 500 shares around (if the company didn't do a buyback) and now the market capitalization is 4500$. Where did the $500 go? Nowhere. The market cap just represents the perceived value of the company