

Apple Is Now More Than Double the Size of Exxon–And Everyone Else - Nowyouknow
http://blogs.wsj.com/moneybeat/2015/02/23/apple-is-now-more-than-double-the-size-of-exxon-and-everyone-else/?mod=e2fb

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Zirro
And yet there is room to grow. When Microsoft peaked, they had almost achieved
a monopoly-sized market share. Apple on the other hand has managed to grow
this large despite their most successful product having a minority market
share. It is both impressive and just a little bit scary.

~~~
justin66
I read your comment as implying that Apple's potential to swallow the world by
increasing in size is scary. The other way of looking at it, if you're an
Apple investor: Apple's lack of a "moat" is scary.

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tinkerrr
> is a 30% stock jump from becoming the first trillion-dollar company

This is incorrect. The reason is share buybacks, which Apple has been
aggressive with. Remember, when the price was $100 last (split adjusted), its
market capitalization was $700 billion. Today, it's price is $130, but the
market capitalization is not $900 billion, but only $765 billion. This is
because the number of shares outstanding has gone down significantly.

In this scenario, the price and market capitalization will not increase by the
same percentage. In fact, it is possible for Apple to have a very good price
return with no increase in market capitalization at all (consider it generates
a lot of free cash flow to buy back stock).

~~~
coralreef
Market cap is calculated by outstanding shares * share price. A company buying
back its shares shouldn't affect the outstanding shares figure, because it
already includes it.

However now that there are less publicly available shares available on the
market, the share price should go up, as long as there is demand. By how much,
I don't know, perhaps it ends up making Apple more valuable.

~~~
tinkerrr
When a company buys back shares, the number of outstanding shares decreases.
That's the whole reason for buying back shares. See
[http://www.investopedia.com/articles/investing/112013/impact...](http://www.investopedia.com/articles/investing/112013/impact-
share-repurchases.asp) for a basic introduction to share buybacks.

~~~
coralreef
I see, so even if outstanding shares is reduced, each share becomes "more
valuable" as EPS will improve. So perhaps the market cap will end up balancing
itself out?

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josefresco
In this case, size = market cap. Just thought it would be helpful to clarify
which metric is being discussed.

~~~
greggman
Yea, I'd probably consider size by employees and they aren't even in the top
100 there.

~~~
pbreit
Size by employees is a terrible metric. Market cap isn't perfect but it is the
company's actual value after all. Revenue and profit are more imperfect, IMO.

~~~
jdmichal
> Market cap isn't perfect but it is the company's actual value after all.

It's not the company's actual value, but rather the company's actual
_valuation_. Related, but very different, concepts.

~~~
pbreit
I'm not sure they're very different, if at all. I guess a public valuation is
a bit under what you'd actually need to pay to acquire it outright.

~~~
jdmichal
Most simply, value is a non-fixed inherent property that can change depending
on the asset / liability and the entities involved. A valuation is an actual
_estimated_ value given some conditions.

Simple example: Celery has no value to me, because I find its taste
disgusting. However, I happily pay for bundles of cilantro, which in turn have
no value to others that find _its_ taste disgusting.

In the case of a publicly traded company, the conditions are "if all shares
were immediately liquidated at the current price". In the case of a company
buying that publicly traded company, an actual value can be arrived at, due to
having a fixed set of assets, liabilities, and participating entities. And, as
you pointed out, those two numbers rarely match up.

~~~
pbreit
Well, I don't think it's entirely uncommon for a complete set to command a
premium.

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ChuckMcM
And it is useful to note that the previous company in this position was also a
"tech" company (IBM). The point being that "big tech company" is like "big
algae bloom", at some point they run out of oxygen or iron or something and
die down to a much smaller size :-)

~~~
thewarrior
Or maybe the Apple Car works out just in time to give us the worlds first
private corporation with a multi trillion dollar valuation. ;)

~~~
ChuckMcM
I can't really tell if you are being serious, but an interesting tidbit from
[http://www.thepeoplehistory.com/1984.html](http://www.thepeoplehistory.com/1984.html)
which looks at what happened in 1984 (when IBM was bigger than Exxon) was
this:

    
    
       The first Apple Macintosh goes on sale
    

IBM pretty much "owned" the PC market (it was called the IBM PC market for a
reason) and yet the first moves by a company that would later eclipse it were
already visible. Always interesting to look back and see how that worked out.
Fair warning though, so far it hasn't helped my forecasting ability :-)

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serve_yay
No longer "beleaguered", but still doomed. :)

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hellbanner
Can someone explain HN's front page algorithm? This is on the front page with
0 comments & 4 points.

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olalonde
[https://news.ycombinator.com/item?id=1781013](https://news.ycombinator.com/item?id=1781013)
although the algorithm might have changed since then. Roughly, a recent post
with few points can rank higher than an old one with many points.

~~~
larrys
For example I wonder if that algorithm (which I don't understand) takes into
account (or has changed to take into account) the source link of the story (in
this case wsj.com). Either positive or negative. (Maybe it says that already?)

~~~
bri3d
HN has domain penalties as well as keyword penalties.

Here's dang talking about the NSA and Snowden keyword penalties yesterday:
[https://news.ycombinator.com/item?id=9097596](https://news.ycombinator.com/item?id=9097596)

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hacknat
> Three decades hence, the most-valuable company is worth more than 10 times
> that and is a 30% stock jump from becoming the first trillion-dollar company

Completely meaningless and sort of untrue, if you're willing to take the 15
seconds it takes to get your butt over to the CPI calculator.

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PinnBrain
So how does Apple navigate the Singularity? Google has more projects directed
at it, some explicitly like Calico. Perhaps I'll walk into the Google uploader
and drop off my Apple watch and phone.

~~~
minikites
Isn't the singularity definitionally impossible to prepare for?

~~~
Retra
Nothing is true by definition.

~~~
minikites
Yes, there are in fact many things that are true through a pre-defined
definition.

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hahainternet
Would anyone like to try and justify this as being a good thing? I don't mind
some of Apple's business practices but they have now reached the stage where
they cannot be competed against.

They own or completely control their entire supply chain and can undercut
every competitor as well as invest 10x as much as anyone else to beat the
competitors.

What a capitalist disaster.

~~~
glhaynes
Seems a bit hyperbolic. Anti-trust laws are still in place, but I don't see
anyone seriously arguing that Apple engages in widespread anti-competitive
behavior, much less calling for a legal remedy.

Apple certainly _is_ in a place that they could illegally crush competitors if
they were so inclined, but the fact that they're not doing so seems to make
the natural read of the situation that they've been hugely rewarded for making
products that customers can't wait to spend their money on. Hardly a disaster.

~~~
freehunter
They do engage in widespread anti-competitive behavior, by making really good
products that people want to buy! It really hurts their competition's ability
to sell cheap plastic laptops.

All joking aside, the fact that Apple could crush anyone but has explicitly
chosen _not_ to is worthy of some amount of praise.

~~~
mike_hearn
The only reason they aren't able to crush people is because of Android and
Microsoft. If you look at how the App Store was run and the general way Apple
did things before Android became dominant, it was pretty scary. There were
stories almost every other day about Apple just arbitrarily banning apps that
might have conceivably intruded upon their corporate interests.

~~~
freehunter
But they could drop the prices on their devices and corner the market
overnight. If Apple offered an iPhone 6 for $99 off contract and a $299
Macbook Air... not everyone would switch, but enough would that their
competitors would have a hard time staying in business. And Apple could do it.
Forgetting for a second that dumping is generally illegal, selling products at
a loss in order to put competitors out of business isn't unheard of.

