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What Happens When Apple Passes Microsoft In Value? Yes, When. | |
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| Time: 07:28 EST/12:28 GMT | News Source: TechCrunch | Posted By: Kenneth van Surksum | ||
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Apple’s stock is up over $3 today, pushing it past the $230-a-share mark. Microsoft’s is down $0.25, pushing it below the $30-a-share mark. While this discrepancy is huge on the surface, it doesn’t mean all that much because there are many, many more outstanding shares of Microsoft stock out there on the market (ten times more, in fact). That’s why Microsoft’s market cap is higher than Apple’s, despite the individual stock price difference. But that market cap gap is closing. Quickly. | ||
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| #1 By 13997 (71.193.149.254) at 3/28/2010 3:40:42 PM |
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This article is a BIG joke...
Let's just keep it simple, the author compares MS QUARTER revenue to Apple's YEARLY revenue and sees them as CLOSE. (MS 15B vs AP 12B). Microsoft makes five times Apple's net revenue (59B vs 12B). I won't even go into the whole inflated stock, the lack of dividends, etc between the companies, as the author seems to think these two companies are close to the same in yearly revenue. Geesh... |
| #2 By 8556 (173.27.242.53) at 3/28/2010 4:21:24 PM |
| According to Yahoo! finance Apple stock's P/E ratio is 22.49 while MSFT is a more down to earth 16.34. Historical averages are about 14. What goes up, must come down. Apple appears to currently be overvalued, except by those willing to overpay for it, of course. |
| #3 By 23275 (68.117.163.128) at 3/28/2010 9:59:29 PM |
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not to mention that Microsoft is more than twice as profitable and they pay dividends.
The article also demands that Apple stock break $300.00/share - as if MS's stock would remain static? |
| #4 By 2960 (72.205.26.164) at 3/29/2010 9:15:14 AM |
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#3,
Apple stock has split out several times over the last 15 years. I have no idea about Microsoft. |
| #5 By 23275 (68.117.163.128) at 3/29/2010 9:33:09 AM |
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TL,
Few stocks have split more than Microsoft's, who has 8.77 Billion shares out. By comparison, Apple has 907.79 Million out (hence its much higher price per share in relative terms). This is a complex issue and one has to understand it in several contexts and depending upon what other factors apply (for example, what kind of stock? at what ratio, etc...) See, http://www.microsoft.com/msft/FAQ/stocksplit.mspx Payable Date Type of Split* Closing Price Before Closing Price After September 18, 1987 2 for 1 $114.50 (Sep 18) $53.50 (Sept 21) April 12, 1990 2 for 1 $120.75 (Apr 12) $60.75 (Apr 16) June 26, 1991 3 for 2 $100.75 (Jun 26) $68.00 (Jun 27) June 12, 1992 3 for 2 $112.50 (Jun 12) $75.75 (Jun 15) May 20, 1994 2 for 1 $97.75 (May 20) $50.63 (May 23) December 6, 1996 2 for 1 $152.875 (Dec 6) $81.75 (Dec 9) February 20, 1998 2 for 1 $155.13 (Feb 20) $81.63 (Feb 23) March 26, 1999 2 for 1 $178.13 (Mar 26) $92.38 (Mar 29) February 14, 2003 2 for 1 $48.30 (Feb 14) $24.96 (Feb 18) *Type of split: 2 for 1 = One additional share for every share held (multiply the number of shares by 2 for a new total) 3 for 2 = One additional share for every two shares held (multiply the number of shares by 1.5 for a new total) |
| #6 By 23275 (68.117.163.128) at 3/29/2010 9:46:21 AM |
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Cont from #5, above.
To give you some perspective here... at the original share price one would have to multiply an original share by a factor of 288 - accounting for nine (9) stock splits. While you can't simply multiply current stock price by 288 to understand how the value of the company has increased, it does provide a useful number to understand how the company has grown in value since 1986 (when it went public) - e.g., if left alone, a single Microsoft original share would be valued at roughly $8,553.60. When you compare that to Apple's current stock price, it offers some perspective. Finally, you have to consider how many stock buy backs Microsoft has conducted - delivering above market value to shareholders, in efforts to drive stock prices up, or hold them steady, while paying divdends as well. Many people live off of dividends - retired people who specifically hold stable stocks. The companies and their stocks are very different and this includes their stocks. Please note and see: Let's chew on Apple. Its last split was nearly five years ago. The Cupertino cutie opted for a 2-for-1 split when its stock was at nearly $89 in February 2005. Its previous split took place five years earlier, as its stock crossed the $100 mark. You then have to go all the way back to 1987, when it announced another 2-for-1 split as its stock hit $80. and 2. Share price is the new trophy My other theory is that companies are now treating their stock prices as if they were gunning for the "high scores" list on a video game. From, Rick Aristotle Munarriz , http://www.fool.com/investing/general/2010/02/17/say-farewell-to-stock-splits.aspx This post was edited by lketchum on Monday, March 29, 2010 at 09:56. |
| #7 By 1896 (68.153.171.248) at 3/29/2010 1:05:29 PM |
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The article is pathetic; the author is totally clueless.
A better way to compare the two companies from a long term INVESTOR point of view would be stock appreciation in 5 and 10 years: Apple 5 years: 430% Apple 10 years: 648% MS 5 years: 18.91% MS 10years: -14.97% Another comparison based on 20 years shows: Apple 20years:2153.28% MS 20years:2826.08% What is very interesting is that Apple was flat with some diving in negative territory until mid 2003 while MS was skyrocketing till 2000 and flat, slightly negative after that. This post was edited by Fritzly on Monday, March 29, 2010 at 13:13. |
| #8 By 23275 (68.117.163.128) at 3/29/2010 3:12:30 PM |
| #7, yep - and note also, that AFTER 2003, is when Microsoft began paying out handsome dividends ( for those that don't understand what this is, Dividends are "distributions" paid in cash to shareholders for simply owning a stock. The stock holder is NOT/NOT required to sell their interest and something long term investors in Apple have asked the company to do ). |
| #9 By 1896 (68.153.171.248) at 3/29/2010 3:57:59 PM |
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#8: Iketchum: to be specific, and keep it simple, dividends are a certain portion of corporate profits paid out to stockholders; the rest of the profits, called " retained earnings" are reinvested in the company.
MS also paid a "special" dividend in the amount of $3 per share in 2004; since 2005 the company began to pay quarterly dividend. On the other hand Apple paid dividends till 1995; after that they stopped, I would add obviously considering that the company almost became history. IMO the big problem with computer related, and software companies in particular, is that because they had a very fast start, compared to more "established" companies, investors were satisfied to see the value of their holdings grow so rapidly and did not mind the lack of dividends. While now these so-called "new companies" are not so new anymore and shareholders could become more vocal about dividends I expect Apple to follow MS path: begin to pay dividends when the stock appreciation path will start to slow down, or worse, become flat. Disclaimer: I own shares of both Apple and Microsoft. This post was edited by Fritzly on Monday, March 29, 2010 at 16:00. |
| #10 By 11262 (96.250.10.179) at 3/29/2010 10:00:19 PM |
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Kenneth van Surksum must be smoking something for sure. Because as he struck that match, he read on the back of that match book where he can get his degree in business.
Activewin, do you publishing anything? You do! OK, News Tip: "Windows 7 Was The Aliens Idea; Not My Idea". This post was edited by Draganta2000 on Monday, March 29, 2010 at 22:04. |
| #11 By 11262 (96.250.10.179) at 3/29/2010 10:01:20 PM |
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Double post. Ignore. This post was edited by Draganta2000 on Monday, March 29, 2010 at 22:02. |
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