*"It suggests the market is no longer performing its intended function of alloca... | Hacker News

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		djoldman on Sept 21, 2012 \| parent \| context \| favorite \| on: What Business is Wall Street In? "It suggests the market is no longer performing its intended function of allocating capital to those companies that will use it most efficiently." Please explain how the trading of a company's stock changes that company's capital allocation.

lmm on Sept 23, 2012 [–]

A company's market capitialization is its capital allocation. It's reasonably common for companies to use their own stock when making big buys (such as other companies).

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