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Groups > comp.os.linux.advocacy > #289135
| From | owl <owl@rooftop.invalid> |
|---|---|
| Newsgroups | comp.os.linux.advocacy |
| Subject | Re: It was bound to happen sooner or later |
| Date | 2015-04-11 20:02 +0000 |
| Organization | ok by me, so long as it doesn't get out of hand |
| Message-ID | <bghvue93.jge4@rooftop.invalid> (permalink) |
| References | (4 earlier) <mgb69g$h0h$1@dont-email.me> <jgnvmb83.gkjd@rooftop.invalid> <6eedff8d-021a-4fc3-a4f2-84ec005fe5b0@googlegroups.com> <vncbhdu3.jgie@rooftop.invalid> <b66f86ff-41e5-4d09-8bb8-fe41386bc001@googlegroups.com> |
Steve Carroll <fretwizzer@gmail.com> wrote: > On Saturday, April 11, 2015 at 11:17:05 AM UTC-6, owl wrote: >> Steve Carroll <fretwizzer@gmail.com> wrote: >> > On Saturday, April 11, 2015 at 8:45:59 AM UTC-6, owl wrote: >> >> Ezekiel <zeke@nosuchemail.com> wrote: >> >> >> >> > "owl" <owl@rooftop.invalid> wrote in message >> >> > news:bghvur80.ra0@rooftop.invalid... >> >> >> Ezekiel <zeke@nosuchemail.com> wrote: >> >> >> >> >> >>> "owl" <owl@rooftop.invalid> wrote in message >> >> >>> news:gbvjdu03.pa3f@rooftop.invalid... >> >> >>>> Ezekiel <zeke@nosuchemail.com> wrote: >> >> >>>>> Apple is worth twice as much as Google. >> >> >>>> >> >> >>>>> Or Google is worth 1/2 as much as Apple if you prefer. >> >> >>>> >> >> >>>>> AAPL = $740.33B >> >> >>>>> GOOG = $367.59B >> >> >>>> >> >> >>>>> I know many of you are confused because of "share price." But don't >> >> >>>>> be. >> >> >>>>> It's market-capitalization that determines what a company is worth. Not >> >> >>>>> the >> >> >>>>> share price. >> >> >>>> >> >> >>>>> Don't be like this dimwit below. >> >> >>>> >> >> >>>>> -- >> >> >>>>> "Share price is a measure of market confidence based on current >> >> >>>>> performance. >> >> >>>>> The market is apparently twice as confident of ($600) Google as it is >> >> >>>>> of >> >> >>>>> ($320) Apple, and 20 times more confident than it is of ($28) >> >> >>>>> Microsoft. >> >> >>>>> So >> >> >>>>> what Google is doing today is apparently better than what others are >> >> >>>>> doing." >> >> >>>> >> >> >>>>> Homer the "advocate" lecturing others on another simple concept he >> >> >>>>> completely fails to understand >> >> >>>> >> >> >>>> Yeah, but market cap is basically a popularity contest. >> >> >> >> >> >>> To a very small extent. There's always the "now company people want to >> >> >>> see >> >> >>> in the portfolio" thing but it's primarily based on fundamentals and >> >> >>> expected future earnings. >> >> >> >> >> >> >> >> >>>> Apple doesn't have >> >> >>>> all that money, and they don't get money every time a share of Apple >> >> >>>> stock >> >> >>>> is sold at a higher price. Apple got paid one time - the day the stock >> >> >>>> was >> >> >>>> issued. >> >> >> >> >> >>> Yes and no. When a company has their IPO they don't release all the >> >> >>> shares. >> >> >>> It's called the "float" and nearly every company owns and holds shares in >> >> >>> their own company. When you hear a company is spending billions on a >> >> >>> "stock >> >> >>> buyback" then they're buying more of their own shares. Companies use the >> >> >>> shares they own for bonuses, etc but they'll also sell some shares to >> >> >>> raise >> >> >>> capital. >> >> >> >> >> >> >> >> >>>> 2014 Liabilities & Shareholders' Equity: >> >> >>>> Apple: 231.84B >> >> >>>> Google: 131.13B >> >> >>>> Microsoft: 172.38B >> >> >>>> >> >> >>>> http://www.marketwatch.com/investing/stock/aapl/financials/balance-sheet >> >> >>>> http://www.marketwatch.com/investing/stock/goog/financials/balance-sheet >> >> >>>> http://www.marketwatch.com/investing/stock/msft/financials/balance-sheet >> >> >>>> >> >> >> >> >> >>> This is an interesting accounting trick. You see companies with insane >> >> >>> amounts of money in the bank yet these companies issue debt (ie - borrow >> >> >>> money) to raise capital. >> >> >> >> >> >>> The reason behind this is that Apple/Microsoft/Google have the highest >> >> >>> possible bond ratings. So they can borrow money at a low interest rate >> >> >>> and >> >> >>> then deduct the interest from their taxes. >> >> >> >> >> >>> Most/much/shitloads of the cash they have is overseas. So if they were to >> >> >>> bring that cash back into the US they would need to pay US taxes on the >> >> >>> money. So it's cheaper to borrow money (at low rates) than it is to bring >> >> >>> in >> >> >>> money from foreign subsidiaries. >> >> >> >> >> >> Actually I grabbed the wrong line. >> >> >> >> >> >> Total Equity 2014: >> >> >> Apple: 111.55B >> >> >> Google: 104.5B >> >> >> Microsoft: 89.78B >> >> >> >> >> >> So they are really *much* closer than market cap would indicate. >> >> >> I mean, really, if Apple's share price fell to $1 tomorrow, based on >> >> >> some wild news that made everybody suddenly hate the company and dump >> >> >> their stock, the company would still actually be in the black to the >> >> >> tune of 111.55 billion >> >> >> >> > Having $111 billion in the bank isn't a bad thing. According to their latest >> >> > SEC filing it's now up to $178 Billion. >> >> >> >> > "Apple has mind-boggling $178 billion in cash to spend" >> >> > (CNN-Money) >> >> >> >> >> >> >> >> >> and the shareholders could force the board >> >> >> to give them some moolah. >> >> >> >> > Here's where it gets tricky. For example, Google founders did a power-play >> >> > and made it so that ordinary share-holders have no voting rights. On top of >> >> > that, their special "class-B shares" (that don't trade on the market) get 10 >> >> > votes/share whereas ordinary class-A shares get only 1 vote per share. >> >> >> >> > The bottom line is that even if every single Google shareholder in the world >> >> > agreed on something - they can't force the company/board to do squat. >> >> >> >> > <quote> >> >> > I believe this stock split is largely being done so that Sergey Brin and >> >> > Larry Page can maintain voting control over everyone else. >> >> >> >> > However if they don't execute well they can't be "forced" to change by >> >> > everyone else. >> >> >> >> > Currently everyone except Brin, Page, Eric Schmidt, Google's ex-CEO and >> >> > Executive Chairman, and a few other people own Class A shares. Class A >> >> > shares get one vote for each share. >> >> >> >> > Class B shares are largely owned by Brin, Page and Schmidt and they get 10 >> >> > votes per share. In total there were 56,167,343 Class B shares outstanding >> >> > on January 30, 2014. >> >> >> >> > Class C shares will be given to the Class A and B shareholders but receive >> >> > no votes on stockholder resolutions. Their trading symbol will be the >> >> > historical GOOG after the split. These are the shares that the company will >> >> > probably issue going forward for acquisitions or stock awards. >> >> >> >> >> >> > This means that Brin and Sergey have 468 million votes compared to the 280 >> >> > million Class A shareholders, essentially complete control of the company as >> >> > they have just over 55% of the total votes. Maybe the Board could exert >> >> > enough pressure on either Brin or Page to step down if they thought it was >> >> > being taken in such a wrong direction that it warranted action but otherwise >> >> > the founders have complete control. >> >> > </quote> >> >> > http://www.forbes.com/sites/chuckjones/2014/04/02/google-stock-split-in-larry-and-sergey-we-trust/ >> >> >> >> >> >> >> >> >> Regardless of whatever is happening trade-wise on the market, a stock >> >> >> represents an ownership share of the company, and if the company is >> >> >> strong financially, that share has value separate from its market value. >> >> >> Likewise, whatever inflated price a stock might be selling for has no >> >> >> real relation to the "value" of a company. >> >> >> >> > A companies assets (like $178 billion in the bank) gets factored into the >> >> > companies valuation. So in Apple's case, they're a $562 billion dollar >> >> > company with $178 billion in the bank. >> >> >> >> All that really means though is, "this is how we're going to do the math." >> >> A company is truly only worth its net worth: assets - liabilities. >> >> > As assessed by whom and valued by what standard(s)? >> >> > There is no "truly only worth", there is only an accepted value that has, presumably, been reasonably assessed by the person interested in buying. >> >> Here's a hypothetical to illustrate. I have a company I started years ago. >> We went public at some point in the past, and we have famous name and logo. >> We have $20 billion in cash in the bank, but we have basically sold off >> everything else and are not really doing business other than paying the >> light bill every month. We have no assets aside from our $20 billion >> in cash. Now the stockholders haven't really been paying attention to >> our actual financials. They've just been buying and selling shares to >> each other, and that has driven the share price up over time to where >> our market cap is $100 billion. What kind of moron would want to buy >> our company outright for the required $200 billion, when all we have >> to our name is $20 billion in the bank? > You need to consider what you wrote: "this is how we're going to do the math" > So what is the math and how, exactly, do you realistically value assets while leaving the market out of it? You can't. Sure you can. Assets - liabilities. That's the value of the company. Its net worth. It has nothing to do with market cap. There is no reason other than sleight of hand to treat companies different from any other thing of value just because they have shares of company ownership traded on some market. > You made the best point already, share price alone doesn't denote relative (with respect to size and type of company) value. The market cap gives you what the share price alone can't, the approximate value of the company's equity as seen in a given market. Perhaps you're confusing market cap with enterprise value? This seems to be what you're driving at. If not... well, I'm not sure what you're trying to say. Of course you're not, because you take the opinion that the market cap determines a company's value. Trading shares on the market is something different from buying the entire company - even though that would entail purchasing all of its shares. If you're just trading, you're just interested on making a profit on the sale of a share on the market. If you buy the whole company, you're thinking more in terms of "what is this crap I just bought actually worth." Nobody buys a whole company with the idea of dribbling shares out on the market the next day to make some minute per-share profit. And if the idea is to flip the whole company in a short timeframe, instead of breaking it up and selling its assets for profit, then it would be unrealistic to think that anybody else is going to buy the whole thing from you, at a profit for you, when you just paid 4 times its equity value. If the idea is to keep the company and run it, because it has a great return on assets, you're not going to want to wait to 20 years to break even on an outrageous purchase price.
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It was bound to happen sooner or later "Ezekiel" <zeke@nosuchemail.com> - 2015-04-10 16:12 -0400
Re: It was bound to happen sooner or later Tomas <tgif9fri@numo.net> - 2015-04-10 16:15 -0400
Re: It was bound to happen sooner or later "Ezekiel" <zeke@nosuchemail.com> - 2015-04-10 16:29 -0400
Re: It was bound to happen sooner or later Tomas <tgif9fri@numo.net> - 2015-04-10 17:20 -0400
Re: It was bound to happen sooner or later Steve Carroll <fretwizzer@gmail.com> - 2015-04-10 13:33 -0700
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-10 22:07 +0000
Re: It was bound to happen sooner or later "Ezekiel" <zeke@nosuchemail.com> - 2015-04-10 19:20 -0400
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 00:19 +0000
Re: It was bound to happen sooner or later "Ezekiel" <zeke@nosuchemail.com> - 2015-04-11 09:08 -0400
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 14:45 +0000
Re: It was bound to happen sooner or later DFS <nospam@dfs.com> - 2015-04-11 12:21 -0400
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 16:58 +0000
Re: It was bound to happen sooner or later DFS <nospam@dfs.com> - 2015-04-11 22:00 -0400
Re: It was bound to happen sooner or later Steve Carroll <fretwizzer@gmail.com> - 2015-04-11 09:43 -0700
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 17:17 +0000
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 17:20 +0000
Re: It was bound to happen sooner or later Steve Carroll <fretwizzer@gmail.com> - 2015-04-11 11:58 -0700
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 20:02 +0000
Re: It was bound to happen sooner or later Steve Carroll <fretwizzer@gmail.com> - 2015-04-11 13:56 -0700
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-11 21:48 +0000
Re: It was bound to happen sooner or later "Ezekiel" <zeke@nosuchemail.com> - 2015-04-13 14:01 -0400
Re: It was bound to happen sooner or later Snit <usenet@gallopinginsanity.com> - 2015-04-13 11:21 -0700
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-13 19:24 +0000
Re: It was bound to happen sooner or later "Ezekiel" <zeke@nosuchemail.com> - 2015-04-13 16:04 -0400
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-13 20:35 +0000
Re: It was bound to happen sooner or later Steve Carroll <fretwizzer@gmail.com> - 2015-04-13 14:13 -0700
Re: It was bound to happen sooner or later owl <owl@rooftop.invalid> - 2015-04-13 21:52 +0000
How many barrels of oil will the stock produce ? Jeff-Relf.Me <@.> - 2015-04-13 23:42 -0700
Re: How many barrels of oil will the stock produce ? "Ezekiel" <zeke@nosuchemail.com> - 2015-04-14 13:37 -0400
How many barrels of oil will the stock produce ? Jeff-Relf.Me <@.> - 2015-04-14 10:55 -0700
Re: How many barrels of oil will the stock produce ? "Ezekiel" <zeke@nosuchemail.com> - 2015-04-14 15:20 -0400
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