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Something's only worth what somebody else is willing to pay for it. Try buying the NYT for $950 million one share at a time. You will actually drive the price up, since there's displayed demand. The market cap is just the sum of all of its shares multiplied by the last price the share traded at. It would take considerably more to purchase the entirety of the company.

That being said, Instagram sold for an outrageous amount. But this article is rather naive in how stock markets work or how companies are valued.

You actually still would be extremely unlikely to succeed in doing it because of the dual class stock structure. Most of the actual voting power is in the Class B shares which are owned by a family trust which can't sell shares to anyone outside the family.

"It would take considerably more to purchase the entirety of the company."

What you said is true. But the argument of "worth more" etc. is arbitrary and just looks good in print. Same as clearing x million users etc.

So even if you had to pay 1.4 billion (a 40% premium) to buy all the shares of the NYT it still shows an interesting comparison of value.

If only because every person who owns NYT stock at a $950 million market cap expects it to go up - otherwise why hold the stock?

Asset allocation is about relative performance and capital preservation in real terms.

You're right about that. I didn't consider people buying and holding expecting zero real returns, vs eg T-Bills which might offer negative.

But my point was that you'd be merely matching an offer that they'd already implicitly turned down because they expect a better offer later - sell their share of the company at the current market cap.

That can include capital preservation, e.g. maybe you'd rather have exactly 100% of your portfolio value in real terms in 20 years than 100% now, since you believe the market will go down.

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