why a company with a larger market share would have a lower share price compared to a company with a lower market share?
- curtisports2Lv 75 months ago
Companies with larger market shares may be carrying high levels of debt, may have a high P/E ratio, may have other weak fundamentals, may not be paying a dividend, may actually be losing money. Having a higher market share does not mean it's a well-run company.
Well-run companies that pay dividends, have little to no debt, and are otherwise strong, have managed to do all that on the market share they do have. Chasing after more market share often comes with costs a company may decide is not worth the return on investment.
- zman492Lv 75 months ago
Any number of reasons.
o Investors might have more faith in the management of the company with the lower market share.
o The company with a lower market share may be a likely takeover target while the company with the larger market share is not.
o The company with the lower market share may be growing faster.
o The company with the lower market share may have more cash or lower debt.
o The company with the lower market share may have higher dividends.
o The company with the lower market share may have fewer (diluted) shares.
o The company with the higher market share may have more legal liability for corporate malfeasance.
o The company with the lower market share may have higher profits per share.
o Analysts rate the company with a lower market share higher.
- Anonymous5 months ago
I don't even know where to begin.....
Market share has nothing to do with share price.
Shares outstanding can & do vary a lot.
Debt levels ttoo.