IBM Now Officially Worth More Than Microsoft

liqs8143 writes with news that IBM's market cap has surpassed Microsoft's, making it the second most valuable tech company. When the market closed on Friday, IBM was valued at $207.52B, while Microsoft was valued at $206.52B. "At one point during the PC era, Microsoft's value climbed three times higher than IBM's. Apparently, this has been a long two decades in Armonk, N.Y., but Microsoft also is no longer the beast it once was. The guard is changing. Besides Apple, there is also Google. While Google is valued at about $170.59 billion, less than the other three, its $31 billion in annual revenue is half of Microsoft's $69 billion and less than a third of IBM's $101 billion. Waiting in the wings is Facebook, which has been valued in the private market for as much as $50 billion, on negligible revenue."

Comments

capitalism fail

[Lehk228]

and this is why the current implementation of capitalism is fatally flawed, it is founded on fraud, deception, and innuendo. facebook is valued at $50 billion dollars even though it makes very little money and will wither and die just like every other hit social network when something else comes out.

Re:capitalism fail

[Anonymous Coward]

The question is not whether Facebook is worth $50 bn. Whether it fails or not doesn't matter if none of that $50 bn is yours (and if it is, it's your own fault). The question is whether someone will force you to invest -- i.e. whether the taxpayers will be made to bail somebody out for $50 bn. That has nothing to do with capitalism, and is just bad government. So in actuality, it's not the current implementation of capitalism that is flawed, but the implementation of government.

Re:capitalism fail

[Opportunist]

The flaw is rooted much deeper. We're not comparing the revenue and industrial strength of companies anymore, we're comparing our expectations. Quite literally. The stock value of a company is tied to the analyst's expectations, not the money they earn. More bluntly, we're comparing whether we will find another idiot to sell those toilet papers to before someone notices their lack of value.

I guess it's obvious that a "honest" company that actually produces and sells goods cannot compete with this.

Re:capitalism fail

[Confusador]

If you're investing based on fundamentals and looking at portfolio value after 2 years, you're absolutely right that you're doing it wrong. The question for such an investor should be not about the value but whether the income of those investments is what you thought it will be. If the income is still there, then they will continue to post returns for the forseeable future, hence Buffet's comment that "my preferred holding period is 'forever'."

Yeah, the market will do stupid things in the short term (here meaning periods less than about 10 years), and you can make money based on those movements. Those aren't based on fundamentals, though, so if you're in it for the long haul then a market downturn which isn't based on that data just means it's an opportunity to buy more.

Re:capitalism fail

[khallow]

A couple of years ago I invested in a portfolio of alternative energy companies (top 1 or 2 in solar, wind etc.). ALL of these brought in tons of cash, consistently, quarter after quarter! Since then we had the GUlf of Mexico disaster and Fukushima, and the total amount of extracted oil has certainly not increased. And yet, I am down about 30% on my portfolio value.

These companies are in large part political merchants. Their profit depends on whether they can obtain funding from various governments. With the Democrat loss of the US House of Representatives, the stock market expected these companies to receive considerably less public funding (perhaps factoring in future Republican gains as well) and priced the companies appropriately.

All I can say is that if you missed that, then you weren't investing on the fundamentals.

Re:capitalism fail

[swillden]

It's insane because it's imaginary. It's an imaginary market and it's imaginary value. It's imaginary income. They are also imaginary dollars; imaginary worth imaginary costs. The WHOLE system is imaginary.

Obviously. But so what? What would be real? Gold? A system based on metals would be equally imaginary. The metals might be real, but their value is just as much a collective societal decision as our current approach of believing that audited bits in a computer have value.

The only system that would be truly "real" is barter, where goods with actual value to improve human life are exchanged for other actual goods. However, that system has such insanely high transaction costs that it's simply unworkable. If you're going to have trade, you need a common medium of exchange, and that medium is going to be arbitrary and, to use your word, "imaginary".

Re:capitalism fail

[ChienAndalu]

In a capitalist society you have control over your pension funds.

Negligible revenue

[Arancaytar]

valued in the private market for as much as $50 billion, on negligible revenue

1995 called; they want their bubble back.

It's all funny money.

[VortexCortex]

There is a bit of belly button lint that is valued at over $900 nonillion dollars! That's more money than there is in the world, many times over! I would say her naval lint is priceless, but I may consider letting someone else farm my girlfriend's belly button, If they transfered the world's wealth to me, many times over (to have destroyed -- that shit's evil, and the world would just make more money).

Remember when Yahoo's stock value jumped because MS tried to buy them? Did you notice how much better Yahoo's service was during this time? Remember how their stock price fell drastically after the MS buy-out fell through? Remember how Yahoo's service just turned to utter shit at the same time? No? Right, because it stayed the same. These companies stock prices and Market Caps mean jack shit... it's all decimal numbers attached to feelings -- if more people feel good about having a larger number of a company's stock, then it's "worth" more, irregardless of the actual value of the products and services the companies make... It's all based on emotions! Feelings!!!

Now, say you're AT&T. Your stock price is worth X because of your profit and loss statement. If you spend some profit to make your company worth more -- improved speeds and reliability -- then your stock price will fall because the investors see that you are not bringing in as much profit.

Yes yes, there are Analysts, this is an over-simplification, the actual value does weigh in somewhat, but the feelings do more so -- This really does hold true in most cases. Ergo, one reason the US has shitty Internet is because of the funny-money market.

Granted, I feel that MS should be worth less than IBM, even though I haven't seen a single IBM brand device anywhere in my house for years... Even though I don't like or own Apple products, I feel that they should be worth more than MS because their fanbois are loud.

Is it any wonder that the feeling based values relate directly to the public's feelings and thus directly are reflected in the stock market?

How are you feeling about the banking/mortgage industry? About as well as they are doing, eh? Wonder why that is... It's a shame we didn't learn our lesson about the funny-money market the first time... I once showed that my neighbor has spent enough money playing the lottery to have purchased things they talk about buying if they win -- C'est la vie, people are dumb.

Re:First post

[Hamsterdan]

MacOS 7.x to 9.x was *not* superior to NT. Macs didn't offer multitasking, memory protection and modern stuff until OS X. Better than 3.x, on some points, but not NT (or even 9x)...

LOL WAT?

[FatSean]

The government is going to bail out facebook? Me thinks we've got someone upset with recent elections who wants to inject his anti-government rants into this thread. Government does need some fixing...better regulation of financial markets for one. But your screed comes across as someone who wants to tear it all down.