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Apple Is Now the Most Valuable Company In History
derekmead writes "Apple, as of this morning, is valued at $621 billion, thanks to a stock price that spiked at $663.10 per share (and that has risen this afternoon). That finally beats Microsoft, who previously held the record for most valuable company in 1999 at $619 billion. Incredibly, Apple has almost doubled its valuation in the last year, when it topped Exxon-Mobil for most valuable American company with a valuation of $346 billion. It's not the cleanest comparison, but to give you an idea of how much $621 billion actually is, only 23 countries had a GDP higher than that in 2011. So, basically, Apple alone is worth more than what 200+ countries in the world could produce in an entire year."
Let's compare meaningful value.
If Apple stops pumping iPods, iPhones and iPads tomorrow, what's the worst that will happen?
If Exxon-Mobil stops pumping out oil and refining gas, diesel and jet fuel, what's the worst that will happen?
I'm thinking maybe the metric being invoked here is inadequate to describe the two companies relative importance and thus their ultimate value.
The world's burning. Moped Jesus spotted on I50. Details at 11.
I can't believe Apple is more valuable than the British East India company, or any number of other ventures. You need to measure it in terms of global GDP at the time, or gold, or silver. All of these measures have their flaws (e.g., discovery of vast ammounts of gold in the New World distorted its value for a while). If you're just talking nominal US dollar value then fine; but that's not all of history. It's not such a simple thing to measure.
If Microsoft stops supporting Windows, Office, and other software tomorrow; Business IT structure would probably collapse.
Ever heard of the British East India Company?
Facebook, a nothing income company that hasn't even found a working business model: IPO for 100 billion. Apple, a maker of expensive shiny trinkets, the largest market cap on the street. Benjamin Graham would have a lot to say about times like these. I sure hope most of your money is in bonds right now because this next one is going to hurt even more than the last one. But go on chumps, keep buying into the bubble. It's going to go up forever and we'll all be rich!
Seven puppies were harmed during the making of this post.
Several things.
1. It would NOT collapse. All those computers would not suddenly stop working.
2. Only business IT structure that is build on Microsoft would even need to be concerned.
Okay, I'll take back #1. Okay, maybe you're right. It would collapse. Without Windows updates, just how many weeks could an IT infrastructure go before it would be hopelessly compromised beyond all possibility of repair.
I'll see your senator, and I'll raise you two judges.
It was such a terrible comparison, given that there is a great comparison for companies when comparing GDP; and it isn't their market cap:
I really fail to see how iPhones, iTunes, and iPads are worth even remotely close to that number. Every one of those products are replaceable. Most become obsolete in a year. This could be the biggest bubble in corporate history. At least Microsoft had a monopoly when they reached that level. In fact, that is the only thing that kept them afloat (Windows OS).
And I don't dismiss that Google is in the same boat. A new technology could quickly wipe out 90% of their value in a year.
If this is not a record, then let's restate it saying that Apple reached $621 Billion with a PE ratio of about 15-16. Microsoft set the record with $619 Billion with an PE ration of 88, about what Facebook had with all its hype. Adjusted for inflation, that $619 Billion record is something like $880 Billion. Yes, it was impressive.
To put this in scope, the second place company in the US is Exxon Mobile, trailing Apple by $200 Billion. Only 9 companies have a valuation of over $200 Billion.
The point is, this is not an internet bubble where the whole market is out of whack.
Oh, and by the way, where is Microsoft TODAY? $256 Billion, almost a quarter of what it was at its peak.
So, yes, Microsoft had the largest valuation 13 years ago. Impressive. Apple has the largest valuation today. Impressive.
And yet Apple contributes very little to the domestic US economy, i.e. no manufacturing jobs. What if Apple made its devices here in the US and accepted a value o 600 billion instead of 621 billion? I own Apple hardware but I hardly place Apple on any kind of pedestal.
The thing about trends is they never end, until they do. Just because some people were wrong about Apple years ago, doesn't mean they're wrong about Apple today.
Apple may be extraordinarily successful, but its success is based upon a product line that is:
1. Almost entirely consumer driven, and
2. Incredibly undiversified.
That's an incredibly risky strategy. Most companies build successful long-term business by establishing well diversified product lines, or by building product lines and business relationships that establish long-term cash flow. Apple's bet their success on their ability to stay cooler than the competition. So what's a more likely scenario for 2022: that the world is still addicted to Exxon's oil, or that the iPhone 10 is still the hottest product on the market?
"True" and "misleading" are not mutually exclusive. Apple may have the current highest market cap, but its only a record high if you do it in "dollars of the day"-- that is, Apples market cap today in todays dollars, and Microsofts 1999 market cap in 1999 dollars. It also tries to conflate "market cap" with "value" when the two are not even CLOSE to synonymous-- whats Facebook's market cap now, and what was it 2 months ago? Did the company start producing more or less, or could it be that "market cap" is simply the result of speculation, and not an actual measure of a company's long term value?
If my car runs out of gas, I'll have to ride my bicycle to work, but at least I can still listen to my music on the way with my trusty iPod. And as an added bonus, no war between China and Japan.
Have fun procuring some arable land to grow your own veggies and raise your own cattle.