Subject: Re: Did I Do the VA Math Wrong?
From: Crispin Cowan <>
Date: Fri, 17 Dec 1999 03:40:46 +0000

David Welton wrote:

> On Fri, Dec 17, 1999 at 02:58:48AM +0000, Crispin Cowan wrote:
> > So, 250M shares * ~$200/share = $50 billion
> >
> > However, it is widely reported that VA has a market cap of ~$7 billion (
> > ).  What am I missing here?  Can someone with
> > better clues than mine tell me how to reconcile these numbers?
> 250,000,000 * 30 = 7,500,000,000
> Could that be what you're looking for?

Seems to be coincidental to me.  My understanding of "market capitalization"
is "the current value of the company as determined by the current share
price."  The IPO price of the shares is pretty meaningless in evaluating the
value of the company.

The key part of the equation is "how many shares?"  The language of the
prospectus is complex, so I could be mis-interpreting it.

Tim O'Reilly wrote:

>  The number of shares authorized doesn't equal the number of shares
> outstanding.  This is quite typical.

There's the rub.  I had thought that market cap was "price * shares
authorized" not "price * shares outstanding".  So that means that VA only has
about 10% of their authorized shares outstanding.  It's still a rather
interesting structure.