[haltingproblem]

Company "worth" is calculated as: last sale price * number of shares outstanding

stock is held by founders and fans ==> few sellers

more buyers than sellers ==> stock price goes up ==> inflates worth

Company worth is an imperfect metric at best and non-sensical at worst.

[aeternum]

I've heard this argument many times, but consider that everyone holding a share has the option to sell at the market (last sale price) and are choosing not to. That seems like a pretty fair way of calculating worth.

[haltingproblem]

Good point.

Stockholders are not free to sell, technically or for practical purposes. Many stockholders are under restrictions to hold like employees, founders, index funds etc. Most non-index institutional holders have to hold TSLA if they want exposure to Automotive, EV, Battery industries. There is simply no option.

On non-technical restrictions, what do you think will happen to TSLA,FB or AMZN stock if Musk, Zuck or Bezos started dumping their holdings respectively. The stock holds up precisely because the the founder is holding it. Necessary but not sufficient.

Finally not everyone who wants to sell can avail the last price. Every bid taker (seller) causes a price impact. This has been explored extensively by academics in Market impact models and Optimal execution of block trades. See [1] and [2]. This is the financial econometric model of "a rush for the exits will cause a stock to crater".

Last price is imperfect but not useless. Depends on how much signal vs. noise you attribute to the sale price in the value discovery process.

[1] http://tuvalu.santafe.edu/~jdf/papers/mastercurve.pdf

[2] https://www.math.nyu.edu/faculty/chriss/optliq_f.pdf

[pintxo]

but if all of them would, the price would fall...

[xkjkls]

I mean, market cap is probably better than most as a metric for valuing companies. If it wasn't, you could make a killing in the stock market by finding companies that are off-base of their value.