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It was bound to happen sooner or later

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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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#289030 — It was bound to happen sooner or later

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

[toc] | [next] | [standalone]

#289032

On Fri, 10 Apr 2015 16:12:07 -0400, Ezekiel 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.

I must admit I never thought that would happen. It seemed to me that
Apple was stagnating while Google seemingly was coming up with new
and fresh ideas. 
It's nice to see Apple doing well. They make great products and have
a loyal following while Google seems to get caught weekly spying on
people or coming up with some really creepy technology like The Nest.

[toc] | [prev] | [next] | [standalone]

#289035

"Tomas" <tgif9fri@numo.net> wrote in message 
news:1nmoar8b7zpig.1325sbu5vy7p8.dlg@40tude.net...
> On Fri, 10 Apr 2015 16:12:07 -0400, Ezekiel 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.
>
> I must admit I never thought that would happen. It seemed to me that
> Apple was stagnating while Google seemingly was coming up with new
> and fresh ideas.
>
> It's nice to see Apple doing well. They make great products and have
> a loyal following while Google seems to get caught weekly spying on
> people or coming up with some really creepy technology like The Nest.

The Nest - errrr.  We own 2 Nest thermostats. Before we moved we had four of 
them in our previous house. Google didn't develop the Nest. (It was actually 
developed by former Apple engineers.) But Google bought Nest and now it's 
become creepy.

Google was doing well for a while but for the next several years they're 
going to be bogged down with regulatory hurdles. Not just in the US but also 
in Europe and the rest of the world. It's going to be difficult for Google 
to do much without a dozen governments jumping down their throat. It's bound 
to happen once you grow to a certain size.

Apple needs a follow-up act to the iPhone. The watch probably isn't going to 
be it. Google has such a dominant position on the web that there isn't much 
growth there for them. They need to expand somewhere beyond the web.

Microsoft is actually the most diversified of the tech giants. Google makes 
nearly all their money from search/advertising. Apple is way too dependent 
on the iPhone. Microsoft has Windows, Office, their Server products (SQL 
Server) XBox, SMB products, hardware (keyboards, mice), etc.

Apple and Google are trying to be diversified but their revenue is much more 
concentrated on just one product than Microsoft is.

-- 
"I suggest (Linus) Torvalds cures whatever disease /he/ is suffering from, 
before he loses what little is left of his credibility."

Some blowhard nobody named "Homer" worried about the lack of credibility 
Linus has within the Linux community.
http://groups.google.com/group/comp.os.linux.advocacy/msg/9dd4f899cbc29f3e?hl=en

[toc] | [prev] | [next] | [standalone]

#289040

On Fri, 10 Apr 2015 16:29:16 -0400, Ezekiel wrote:

> "Tomas" <tgif9fri@numo.net> wrote in message 
> news:1nmoar8b7zpig.1325sbu5vy7p8.dlg@40tude.net...
>> On Fri, 10 Apr 2015 16:12:07 -0400, Ezekiel 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.
>>
>> I must admit I never thought that would happen. It seemed to me that
>> Apple was stagnating while Google seemingly was coming up with new
>> and fresh ideas.
>>
>> It's nice to see Apple doing well. They make great products and have
>> a loyal following while Google seems to get caught weekly spying on
>> people or coming up with some really creepy technology like The Nest.
> 
> The Nest - errrr.  We own 2 Nest thermostats. Before we moved we had four of 
> them in our previous house. Google didn't develop the Nest. (It was actually 
> developed by former Apple engineers.) But Google bought Nest and now it's 
> become creepy.
> 
> Google was doing well for a while but for the next several years they're 
> going to be bogged down with regulatory hurdles. Not just in the US but also 
> in Europe and the rest of the world. It's going to be difficult for Google 
> to do much without a dozen governments jumping down their throat. It's bound 
> to happen once you grow to a certain size.
> 
> Apple needs a follow-up act to the iPhone. The watch probably isn't going to 
> be it. Google has such a dominant position on the web that there isn't much 
> growth there for them. They need to expand somewhere beyond the web.
> 
> Microsoft is actually the most diversified of the tech giants. Google makes 
> nearly all their money from search/advertising. Apple is way too dependent 
> on the iPhone. Microsoft has Windows, Office, their Server products (SQL 
> Server) XBox, SMB products, hardware (keyboards, mice), etc.
> 
> Apple and Google are trying to be diversified but their revenue is much more 
> concentrated on just one product than Microsoft is.

I agree completely.
I'm not a Microsoft advocate to the point where I support everything
they do no matter what. I pick and choose and use what works for me.

In my opinion, Microsoft was ahead of their time with Windows 8.0.
They were looking for a touch based interface on older iron.
Bad combination.
And while their, cross platform, consistent interface is again in my
opinion the future, they were too far out front with it. The users
were not ready for this yet.
Try using Windows 8 with a mouse and traditional monitor keyboard set
up and it's a mess.
Now try using it as a complete touch based system and things change.
It's actually quite nice with the exception of the confusion over
supporting what amounts to two types of applications. Tiles aware and
legacy.

Microsoft really screwed up on this one in my opinion.

Apple has the fanboys mesmerized and that's unlikely to change.
It's like people who spend mega bucks on certain brands of kitchen
appliances or exercise machines when a basic model or walking a
couple of miles a day would suffice.

I use Apple products and I happen to like them but they are far from
the perfect world the hardcore Apple fans like to promote.
Like everything they have their problems, however in the scheme of
things, and certainly compared to Android, Apple is doing it right.

Which brings us to Linux, desktop Linux.
Desktop Linux is clearly years behind the alternatives.
Can it be used?
Of course.
For basic functions, desktop Linux is fine.
And for applications such as super computers, Linux can be a low cost
and very effective solution.

But for a user land person who is trying to function in what is a
Windows and increasingly Apple world, Linux is the absolute worst
choice they could make unless they have some highly specific reason
for needing Linux.

And I have yet to encounter a Linux advocate who can successfully
argue that point.
IOW, tell and show me why Linux is superior for user land.

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#289037

On Friday, April 10, 2015 at 2:11:42 PM UTC-6, Ezekiel 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

Totally insane. 

> 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

[toc] | [prev] | [next] | [standalone]

#289045

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.  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.

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

[toc] | [prev] | [next] | [standalone]

#289062

"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.

[toc] | [prev] | [next] | [standalone]

#289066

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 and the shareholders could force the board
to give them some moolah.  

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.

[toc] | [prev] | [next] | [standalone]

#289091

"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.

-- 
Computer science is no more about computers than astronomy is about 
telescopes - E.W. Dijkstra

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#289100

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.  The
stock market is just respectable a means of gambling and has no relevance
the value of a company.  If I decide to buy Apple one day, there's no
way I'm paying $740 billion for a company that has a net worth of $178
billion.  Now if I'm just planning on trading Apple stock, that's different.
I only care about share price and the likelihood of making a profit down
the line on the sale.

[toc] | [prev] | [next] | [standalone]

#289104

On 4/11/2015 10:45 AM, owl wrote:

> A company is truly only worth its net worth: assets - liabilities.  The
> stock market is just respectable a means of gambling and has no relevance
> the value of a company.  If I decide to buy Apple one day, there's no
> way I'm paying $740 billion for a company that has a net worth of $178
> billion.

Put your thinking cap on: if you owned a company with a market cap of 
$740B you'd be an absolute owl to sell it for substantially less, let 
alone for the tiny book value of $178B.

[toc] | [prev] | [next] | [standalone]

#289111

DFS <nospam@dfs.com> wrote:
> On 4/11/2015 10:45 AM, owl wrote:

>> A company is truly only worth its net worth: assets - liabilities.  The
>> stock market is just respectable a means of gambling and has no relevance
>> the value of a company.  If I decide to buy Apple one day, there's no
>> way I'm paying $740 billion for a company that has a net worth of $178
>> billion.

> Put your thinking cap on: if you owned a company with a market cap of 
> $740B you'd be an absolute owl to sell it for substantially less, let 
> alone for the tiny book value of $178B.

$740 billion market cap would be great if I had bought in in 1980 and
were wanting to sell shares today.  If i'm wanting to buy the whole
company today, it would cost me $740 billion, and once I bought it,
market cap would be meaningless, or rather it would just mean "what
I paid for the company."  I would be left holding a company with a net
worth of $178 billion, for which I had paid $740 billion.  Not good.
Hell, even without considering liabilities, the total value of Apples
assets -- everything they own and all their cash in the bank -- is
only worth $261 billion according to latest quarterly balance sheet.
And their cash in the bank is $19.48 billion, so I don't know where all
this "Apple is sitting on hundreds of billions in cash" stuff comes from.

[toc] | [prev] | [next] | [standalone]

#289164

On 4/11/2015 12:58 PM, owl wrote:
> DFS <nospam@dfs.com> wrote:
>> On 4/11/2015 10:45 AM, owl wrote:
>
>>> A company is truly only worth its net worth: assets - liabilities.  The
>>> stock market is just respectable a means of gambling and has no relevance
>>> the value of a company.  If I decide to buy Apple one day, there's no
>>> way I'm paying $740 billion for a company that has a net worth of $178
>>> billion.
>
>> Put your thinking cap on: if you owned a company with a market cap of
>> $740B you'd be an absolute owl to sell it for substantially less, let
>> alone for the tiny book value of $178B.
>
> $740 billion market cap would be great if I had bought in in 1980 and
> were wanting to sell shares today.  If i'm wanting to buy the whole
> company today, it would cost me $740 billion, and once I bought it,
> market cap would be meaningless, or rather it would just mean "what
> I paid for the company."  I would be left holding a company with a net
> worth of $178 billion, for which I had paid $740 billion.  Not good.
> Hell, even without considering liabilities, the total value of Apples
> assets -- everything they own and all their cash in the bank -- is
> only worth $261 billion according to latest quarterly balance sheet.
> And their cash in the bank is $19.48 billion, so I don't know where all
> this "Apple is sitting on hundreds of billions in cash" stuff comes from.


That's the market value of the cash, cash equivalents, and marketable 
securities they hold.

Dec 27, 2014

Cash and cash equivalents         $ 19.478B
Short-term marketable securities  $ 12.985B
Long-term marketable securities   $145,492B

Total                             $177,955B

http://investor.apple.com/secfiling.cfm?filingID=1193125-15-23697&CIK=320193

[toc] | [prev] | [next] | [standalone]

#289108

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. 

[toc] | [prev] | [next] | [standalone]

#289112

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?

[toc] | [prev] | [next] | [standalone]

#289113

owl <owl@rooftop.invalid> 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?

typo. should read "required $100 billion."

[toc] | [prev] | [next] | [standalone]

#289127

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. 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.

[toc] | [prev] | [next] | [standalone]

#289135

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.

[toc] | [prev] | [next] | [standalone]

#289153

On Saturday, April 11, 2015 at 2:02:47 PM UTC-6, owl wrote:
> 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.  

It still gets back to the same question: How do you place a value on those assets?

> 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.  

It only provides an estimation, enterprise value is more accurate as it considers more issues (I figured maybe that's what you were driving at).

> 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."

Well, isn't that what this portion of the discussion was about, the value of a company (not just it shares) when it comes time to "sell it"? 

I jumped in to DFS saying: "you'd be an absolute owl to sell it"

The "sell it" part means sell the "whole company".

> 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.

Of course not... and if you did that, presumably, it'd only be because you see some serious growth potential. 

>  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.

You seem to be saying market cap means nothing, that it's better to uses Assets - liabilities. But you're also leaving out the answer to the most fundamental question:

How are the assets valued completely devoid of the market that would place a value on them?

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#289160

Steve Carroll <fretwizzer@gmail.com> wrote:
> On Saturday, April 11, 2015 at 2:02:47 PM UTC-6, owl wrote:


>> 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.

> Of course not... and if you did that, presumably, it'd only be because you see some serious growth potential. 

Well, that's the only context where Apple being valued at its market cap
even makes any sense.  That $740 billion dollar market cap does not represent
some war chest that Apple has at its disposal.  It only represents what it
would take to buy all of the company's outstanding stock.  IOW, to buy
the whole company.  Outside of that scenario, what possible meaning does
market cap have to an investor, or to Apple itself, other than as a
curiousity to be noted.  "Is Apple going to be the first trillion dollar
company?!"  That question has no meaning whatsoever unless they are
approaching a trillion dollars in equity.  And they have a long way to
go to get there. 

>>  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.

> You seem to be saying market cap means nothing, that it's better to uses Assets - liabilities. But you're also leaving out the answer to the most fundamental question:

> How are the assets valued completely devoid of the market that would place a value on them?

The assets have a value in the markets where they would be sold, as is
reflected on the company's balance sheet where the company lists their
estimated value.  Those assets would not be sold on the *stock market*,
other than stocks in *other companies* which this company might own,
so I don't see why you keep trying to link this company's assets to
its own stock value.  The stock value could drop to zero or soar to
$1000 per share tomorrow.  Neither scenario would have any effect on
the intinsic value of company assets, such as real estate, equipment,
cash in the bank, accounts receivable, etc.

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