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Groups > comp.os.linux.advocacy > #289466
| From | owl <owl@rooftop.invalid> |
|---|---|
| Newsgroups | comp.os.linux.advocacy |
| Subject | Re: It was bound to happen sooner or later |
| Date | 2015-04-13 19:24 +0000 |
| Organization | ok by me, so long as it doesn't get out of hand |
| Message-ID | <vnhguf93.kjhg@rooftop.invalid> (permalink) |
| References | (2 earlier) <mg9lop$pmr$1@dont-email.me> <bghvur80.ra0@rooftop.invalid> <mgb69g$h0h$1@dont-email.me> <jgnvmb83.gkjd@rooftop.invalid> <mgh079$4d6$1@dont-email.me> |
Ezekiel <zeke@nosuchemail.com> wrote: > "owl" <owl@rooftop.invalid> wrote in message > news:jgnvmb83.gkjd@rooftop.invalid... >> 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.... > True, there's no way you'd ever pay $740 billion for Apple. If > (hypothetically) this were to happen then you'd be paying about $925 > Billion. > Acquisitions happen all of the time. The company being bought out is usually > paid about a 25% premium. Example from just last week: > <quote> > Mylan, one of the big makers of generic drugs, made public on Wednesday an > unsolicited offer to acquire Perrigo for about $29 billion in a deal that > would extensively expand its range of product offerings. > Under the offer, announced on Wednesday, Mylan would pay $205 a share in > cash and stock for Perrigo, a 25 percent premium over Perrigo's stock price > last Friday. Mylan did not specify what the split of cash and stock would > be. > </quote> >> that has a net worth of $178 billion. > The "net worth" or what you've called book-value is going to be very low for > any company. What's the book value for Google ($367B) ... they own a bunch > of used servers? What's the book value for Visa ($161B) - they don't own > much of anything. Or a bank like Wells Fargo ($281B) where they mainly hold > money that doesn't even belong to them. > The way to look at these companies is to view them as a money-making > machine. If your neighbor offerred to sell you a "machine" that legally > produces $100k/year in cash then what would you be willing to pay for the > machine? Would you tell him to take a hike because there's only $3000 worth > of parts in this machine? > Not that this is sustainable, but I'll use Apple's last quarterly earnings > as an example: > <quote> > Apple just posted the best quarter in corporate history > Apple (AAPL) sold 74.5 million iPhones in the last three months. > That helped Apple's profit soar more than 37% to $18 billion. > </quote> > http://money.cnn.com/2015/01/27/technology/apple-iphone-earnings/ > It's a money-making-machine that's currently generating a profit of $8.25 > million dollars an hour, 24x7 around the clock. *That* is what gives them > their market cap. That doesn't change the fact that "market cap" has no real meaning. It does not represent any tangible asset that the company or its investors possess. In other words, Apple's $740 billion market cap might as well be thought of as "the missing $740 billion." So where is this missing $740 billion? Does Apple have this $740 billion? No. Do Apple's investors have this $740 billion? No. They *spent* money for their shares. They now have pieces of paper representing fractional ownership of Apple's equity (which is nowhere near $740 billion) instead of the actual money they used to have. Who does have this missing $740 billion then? Some of it is in the hands of the people (AKA the Smiling Ones) who sold the current Apple stockholders their pieces of paper. The rest of it doesn't even exist at all, because market cap is just a price tag. And a price tag is not the same thing as money.
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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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