Quick Note: "Most Valuable in History" Distinction for Apple? Not Yet
August 21, 2012 11:31 AM
comment(s) - last by
Apple's market cap surpasses Microsoft in its 1990s hey-day
an interesting story on Monday entitled "Apple is now the most valuable company of all time". Similar headlines soon abounded.
Indeed Apple, Inc. (
), despite a
which would be cause for celebration for just about anyone else, has soared in value over the last decade with the success of the iPod, then the iPhone, and most recently the iPad. From 2000 to present, shares increased from a market cap of $8B USD to $623B USD. For comparison's sake gold -- typically consider a massive commodities success story -- has only ballooned from $238 USD per oz. to $1640 USD per oz. at last count.
So when Apple's
market capitalization record
of $623B USD (at $665.15 USD/share) -- more than the $618.9B USD Microsoft was worth (according to investors) in Dec. 30 at the height of so-called "dot com bubble".
But for all the streamers and confetti, the claim that Apple is the "most valuable of all time/in all of history" isn’t accurate. Value is based on the worth of the currency at the time.
"Siri, who is the most valuable company in all of history?" Ding ding.. "In today's dollars Microsoft in 1999 would be." [Image Source: AP Photo]
In 2010 dollars, Microsoft's $618B USD valuation would be over $820B USD. While inflation data is still being finalized for last year, it would likely be somewhere in the ballpark of $850B USD in today's money (
The Columbia Journalism Review
$856B USD in today's money, although it admits to goofing by saying that International Business Machines, Inc. (
) in 1967 was the most valuable, failing to realize that the data it was working off of was already adjusted).
The headlines are particularly troubling, given that even a simple
would have revealed the truth (
pegs Microsoft's peak value at $846B USD in today's money).
In other words, Apple still has to grow by another third in order to truly become the most valuable of all time.
Still, it is fair to lavish Apple with some praise. The company was most profitable tech firm for 2011 and third in total profits. For 2012 Apple is expected to be the most profitable American firm.
Those profits could soar even higher if Apple succeeds in its court
bid to ban rival Samsung
Electronics Comp., Ltd.'s (
) devices from the American market -- the world's most lucrative and second largest smartphone market.
But Apple has a long hard road ahead to become truly the biggest company in history. For now, it is merely in a small crowd of historic elites.
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RE: Typical Mick Garbage
8/21/2012 10:23:42 PM
Apple did however deny the trend during the financial crisis though, allot of other companies were getting hit hard and Apple just continued to grow.
So from an investor stand-point Apple was a reliable bet.
Will that continue? Probably not, it's incredibly over valued and will drop, but that doesn't mean that Apple will suddenly cease to exist.
RE: Typical Mick Garbage
8/21/2012 10:44:56 PM
It will certainly drop, all stocks do. However, by what metric is it overvalued? Their price multiple is near an all-time low and is in line with Microsoft and IBM's. Their stock price is a pure reflection on earnings. If it was priced as a growth stock with a 30+ PE then it'd have crossed a trillion dollar market cap ages ago.
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