| FATALITY said:
market capital is different than assets. nintendo will buy assets not market capital which may chance each hour. |
lol
You don't seem to be looking at the whole picture. There is something called a balance sheet. This shows a company's total assets and total liabilities. Its easy to say "Sony is worth $150bn" but that's not the full story. Sony's total liabilities are a massive $127bn.
There are 2 ways to buy a company. Asset sales or share sales. Share sales are less complex than asset sales and represent the actual value of the firm. You see, aquiring shares mean that you get both the assets and the liabilties of a corporation.
In an asset sale, there is a transfer of individual assets. So in this case, Sony would have to keep the liabilties for itself and pay them off. Why would they want to do that?! And moreover, there are only a few very valuable assets and patents that Sony owns. Those would certainly not be for sale.
And why do you think share prices jump on the news of a firm takeover? Cause shareholders want to make a big profit by selling those shares. When a firm is trying to fully buyout another firm, they go for share takeovers not asset takeovers. And the sellers or owners, prefer share takeovers because there is a lower amount of tax on income gained from a share takeover as compared to an asset takeover.
NNID: FrequentFlyer54
