Itdo - cash as a percentage of market cap is a very relevant figure. In buyout situations financial buyers can use a company's cash on hand to help fund the buyout. If a company's market cap is less than 100% of cash on the company's balance sheet, a buyer could theoretically make a tender offer to purchase all the shares and fund it with that cash, obviating the need to cough up any of his own funds. The buyer would be making a bet that the company's future cash flows, based on patents and products in the pipeline, are worth more than zero.
Rarely does a company trade for less than its cash on hand. If it does trade below cash, either people think the company's officers have been cooking the books (and the cash isn't really there or will eventually be eaten up by restatements of past earnings reports) or the company is hemorrhaging cash with no signs of a turnaround.
When someone calls people who are making valid statements morons, it does not show one comporting oneself with much financial savvy.
There has been media coverage today questioning whether Yahoo (YHOO - do any of you even know the ticker symbol?) has any residual value beyond its stake in BABA. I was a retail stock broker when YHOO was trading at 500 times earnings in 1999. In hindsight, YHOO is one of the few internet companies that survived. At the time, Microsoft peaked at about 60, a level it still hasn't been able to surpass, IBM was still considered a cutting edge tech company, and Mark Zuckerberg was still in high school. To suggest that anyone knows what the present value is of a biotech company that has been unable to bring a successful phase 3 trial to completion, has little current revenue, and is facing a very complicated pricing environment if one of its compounds proves successful, is ridiculous. Suggestions that daily trading activity is rigged smack of ignorance.
Does YHOO have value? Well, do you think this board offers you anything of value? Personally, I check postings here nearly every business day because some of you have posted valuable information (at least valuable to me). The idea that someone here has 80,000 shares of INSM and seems to rely on information that kvn and biowatchdog post in his effort to outflank numerous hedge funds, boggles my mind.
Pardon my rambling, but stock market hubris has always fascinated me. YHOO's decent from market darling to "has been" should give pause to even the most confident among us.