When an investor buy a company, the investor needs to pay not only the common shares, he/she also needs to pay the shareholders of Preferred Stocks. He also assumes the debt of the company, and receives the cash on the company's balance sheet.
If a company has more cash than debt, the investor actually pays less than the market cap because he immediately owns the cash once the transaction goes through.
For the companies with the same Market Cap, the smaller the Enterprise Value is, the cheaper the company is.
Enterprise Value can be negative when the company's net cash is more than its market cap. In this case the investor is basically getting the company for free and get paid for that.
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