CNET.com - "Why Microsoft Should Aquire Sony's Gaming Division"

[rocketpig]

Million said:

Ail said:

Million said:

@ Rocket Please stop your killing an interesting topic

 

So would it be possible for a business to have a high market cap with few assets if it was making alot of profit and projected to make profit for  the forseeable future ?

 

 You just defined Google :) ( and most profitables software companies out there).

 

 

Ahh Internet based business came to mind when I was thinking about that. So who would determine that a business would be profitable for the forseeable future , is there a calculation for it ?.

I'm confused that Assets:Profitability ratio would be used as a standard if businesses like google exist , isn't it unfair ?

Analysts observe trends in the market. The Internet market moves more quickly than most, but it's still relatively slow so projections can be made. In all, it comes down to analysts talking to Google, studying their past financials, looking at asset/debt, observing market trends, and trying to figure out what Google is planning next (unless Google is forthright and tells everyone).

Then they make an educated guess. People buy stocks based on these educated guesses and that's how the whole shebang works, really.