Its meaningless to compare share prices for the two companies. Buying a 'share' of a company means you are purchasing a percentage of that company. Because different companies have different numbers of 'shares outstanding', '1 share' means a diffent percentage of ownership for each company. When you buy a share of disney, you are buying 0.00000005% of the company. When you buy a share of e-bay, you are buying 0.00002857% of the company. This is because Disney has 2 BILLION shares outstanding, and e-bay has 3.5 MILLION shares outstanding. It is much more meaningful to compare market capitalization (how much it would cost, in theory, to buy the whole company). To get that number you multiply share_price * shares_outstanding. Disney's market cap is about 52 BILLION. Ebay's is about 157 MILLION. Anybody feel free to correct me.
...shares not sold to the public, i.e. insider shares. I have seen market capitalization calculated your way (i.e. just using outstanding shares), but most people use all shares in calculating market cap. This is how the current market capitalization of roughly 20 BILLION (not MILLION) is derived for EBay. And this is why so many people are short on the stock - there is no way that this company is worth THAT much. And this is why the shorts feel that as soon as insiders sell, due to simple supply and demand, the price will drop.
Why should you look at ALL shares, not just those in the public float? Because as soon as you calculate earnings per share, or maybe even dividends (am I dreaming about that with EBay?), they are devided by the total number of shares.
Actually your valuation of 157 MILLION for EBay is not far off target in my book, though now most of the longs on this board think I am nuts, since it would imply a far lower price for their stock...
Yes, shorts delima as you say << ...shares not sold to the public, i.e. insider shares >> If the company was like the other internet bubbles expect the inside holders selling out like MR. LAY, but are they.
Cramer can get out for all I care.
If they sell they know what will happen.
Insider shares can not all be in hands that control them, some must be for future use.
Mdccohen... I'm correcting you. Ebay's capitalization is 1.2 billion, not 157 million. Disney's total oustanding shares are valued at 52 billion (fully diluted shares not withstanding). Ebay's float is 157 million... I surmise... but its outstanding shares are worth 1.2 billion.
I surmise that you didn't take the TIME to do your math and it is always wise to calculate the fundamentals before going long.