Groups | Search | Server Info | Keyboard shortcuts | Login | Register [http] [https] [nntp] [nntps]

Groups > comp.os.linux.advocacy > #289113

Re: It was bound to happen sooner or later

Show all headers | View raw

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."

Back to comp.os.linux.advocacy | Previous | Next — Previous in thread | Next in thread | Find similar | Unroll thread

Thread

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

csiph-web