More interesting to you, maybe: You are now worth over a million. Your bank account may be $3,000 lighter than it was yesterday, but you now own 1,001 shares that are each worth $1,000. Hooray, you're a millionaire! Just, don't go buying that new home quite yet. You might have some trouble selling all 1,001 shares to other investors at $1,000 each. In fact, you might have trouble selling even one share to anyone for $1,000.Â
Now, the numbers in that example weren't realistic; I exaggerated to make a point. So let me next give you a real example that's only slightly less ridiculous. At the start of this year, AMC's stock price was $2. The company was worth about a billion dollars. But then, thanks totally to speculation, its stock price rose to $60. The company therefore became valued at $30 billion. They didn't get an extra $29 billion from anyone, and they're actually on track to lose $1 billion this year. The $30 billion is not real money at all, and when they try to turn it into real money, they can expect a few setbacks.Â
AMC
CEO Adam Aron owns four million AMC shares. In January, these were worth $8 million. Today, they're worth $240 million. Definitely, he's had a nice year (thanks to events for which he deserves no credit at all). But if we calculate how much richer he got, we run into problems. Would you say he had an income of $232 million this year, and should pay a third of that in taxes? That'd be tricky, since he doesn't actually have $77 million in money to pay that tax bill. Should he sell a third of his shares to get the money? That's impossible—he's legally barred from selling that many. And even if he could, they'd fetch less than $77 million, as the price will drop as he sells them. Â
Similarly, Jeff Bezos doesn't really have $200 billion in money, and he has no way of converting his vast Amazon holdings into 200 billion actual dollars. You see factoids about the amount he makes every second or what his net worth's like next to yours, but those don't really give you a good picture of how much money he has. Oh, he can turn some of his net worth into money. He can make billions selling Amazon shares—just not the hundreds of billions that the stats say he has.Â