Foreign media commentators believe that the market often interprets "a company losing tens of billions of dollars in market value" as the company actually losing cash of the same amount, but this is not accurate. Market value is determined by both the stock price and the number of outstanding shares. After changes in the marginal trading price, the overall valuation can be quickly recalculated.

Nike's market value has plummeted significantly.

Taking Nike as an example, the article states that the company's market value was approximately $264 billion at the end of 2021, but by September 2026 it had dropped to around $57 billion, a reduction of over $200 billion in total. However, its revenue in the past 12 months was still about $46.4 billion, which is roughly the same on an annual basis.

This indicates that the market's downward revision is not only regarding current sales prospects but also reflects expectations for future growth, profit margins, and competitive landscape. The article states that Nike's price-to-sales ratio has dropped from around 4.0 times in fiscal year 2022 to about 1.2 times currently, and both its price-to-book ratio and price-to-earnings ratio have also significantly shrunk.

Marginal transactions determine the total market value.

The article states that changes in market value do not require an equivalent amount of capital to actually flow out. If a company's stock price falls, the latest trading price will directly reduce the valuation corresponding to all outstanding shares, therefore the market value can shrink significantly in a short period of time.

This does not mean that the company's account has a corresponding amount of cash less, nor does it indicate that investors actually sold stocks of the same scale. Market value is essentially the overall pricing result given by the market at the latest prices.

This logic also applies to the crypto market.

The article points out that the changes in the market value of crypto assets follow the same logic. After a price increase or decrease, the total market value calculated based on the circulation volume will also expand or contract accordingly, but this does not equate to an equal amount of capital actually flowing into or out of the market.

It is also mentioned in the text that when judging the value of a company or an asset, one cannot rely solely on market capitalization. Revenue, profit, cash flow, as well as the enterprise value considering debt and cash, are often more indicative of the business condition and financial structure.