Apple hits $1 trillion market cap, the first US company ever to hit milestone [u]

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  • Reply 81 of 146
    melgrossmelgross Posts: 30,644member
    Soli said:
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina. 


    Get serious here. Petrochina is/was a joke. The stock runup that it had which put it briefly at $1T was a silly little bubble for a commodity company in a nascent Chinese exchange that was having trouble pricing its stocks in its early days. It is at ~25% of that value now, which is closer to its true price.

    The beauty is AAPL is still an undervalued company at this price. It will continue to grow from this level, (in that process, it surely will fall below that number as well, I.e., there will be volatility). It is the first legitimate trillion dollar company. Period. 
    Yes, let's get serious. If we don't count PetroChina's single day blip to $1T USD then why should we could Apple's? How about we save the party favors and rejoicing in the streets until the milestone can be sustained, not just a very brief, inter-day spike in the market?
    It’s not about that number itself. It’s about the sustained growth of the company and the resultant share hikes. With PetroChina,,the price zoomed up, and then zoomed back down again. The price was manipulated by the government, and then handled badly afterwards, just as they mishandled their markets more recently.

    if Apple drops a few percent, it doesn’t matter, because they will go up again. PC was never worth a trillion, but Apple is worth more. It’s undervalued. What’s the forward P/E right now? 15.28! It should be sitting at at least $250 a share right now.
    edited August 2 palomineronn
  • Reply 82 of 146
    JWSCJWSC Posts: 116member
    foggyhill said:

    IBM's errors were a long time after they got to their highest capitalization.
    I think Bill Gates and his (at the time of the sales pitch) vaporware DOS had something to do with IBM’s diminishment.
    watto_cobra
  • Reply 83 of 146
    melgrossmelgross Posts: 30,644member

    seankill said:
    Soli said:
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina. 


    Did PetroChina legitimately get to 1T? Is it even a publicly traded company?
    It happened on their first day of their IPO during a spike. It was sustained for more than a moment, they certainly didn't close that day anywhere near $1T USD, and have been far from it ever since. That's why I don't count this spike as a milestone for Apple until it's sustained, which at least means closing the market with a $1T market cap.

    PS: If not for buybacks Apple would've reached this a long time ago.
    You make the assumption that the share price would have gone to the necessary number to equal 1T without the buybacks; part of Apple’s value is the company’s buybacks. 
    I’ll keep saying it. Buybacks do NOT increase share value by much at all. And most of that is temporary. So, yes, if Apple hadn’t taken about $200 billion off its valuation in buybacks, they would have hit a trillion some time ago. More recently, the buybacks of 43 million shares took off more than $85 billion, going by today’s price. There’s no way that Apple share price rose by that much from those buybacks. The share price rise is from company performance, not buybacks.

    it can be argued that by carrying over $120 billion in debt solely for the purpose of buybacks, and the removal of that amount from the balance sheet has diminished Apple’s worth by the total of the two. - over $240 billion. Now, this quarter, they finally rested some of that debt. That debt, again raised solely for the buybacks, cause Moody and others to downgrade Apple, meaning that further debt cost more.

    i don’t see the value here. Apple could have used some of that for R&D, marketing, investments, etc. Instead, it goes down a black hole as the shares are retired.
    SpamSandwichpscooter63ronn
  • Reply 84 of 146
    JWSCJWSC Posts: 116member
    melgross said:
    in all of this, the buyback monkeys say that it would have been worse without the buybacks, but they can’t prove it.
    The financial logic behind stock buybacks is simple math.  By definition, fewer outstanding shares means that earning per share goes up, which should mean the value of each share increases.

    It may be the case that companies that focus too much of their managerial energy on buybacks lose focus on their products, services and customers, which would diminish the overall value of the company.  I will posit that many buybacks in the past have been done for the wrong reasons by company managers who lost focus of their core business.  But the mathematical logic of buybacks is hard to refute.  Warren Buffet recently stated that he would do buybacks under the right circumstances.

    If it begins to appear that Tim Cook and company are focusing too much time and talent on buybacks to the detriment of new product development, then we ought to be concerned.  But what Apple has been doing with their stock is backed up by sound financial logic.
  • Reply 85 of 146
    melgrossmelgross Posts: 30,644member
    Soli said:
    Soli said:
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina.  


    Get serious here. Petrochina is/was a joke. The stock runup that it had which put it briefly at $1T was a silly little bubble for a commodity company in a nascent Chinese exchange that was having trouble pricing its stocks in its early days. It is at ~25% of that value now, which is closer to its true price.

    The beauty is AAPL is still an undervalued company at this price. It will continue to grow from this level, (in that process, it surely will fall below that number as well, I.e., there will be volatility). It is the first legitimate trillion dollar company. Period. 
    Yes, let's get serious. If we don't count PetroChina's single day blip to $1T USD then why should we could Apple's? How about we save the party favors and rejoicing in the streets until the milestone can be sustained, not just a very brief, inter-day spike in the market?
    Re-read my post. Then try getting serious. 

    In any event, the point is moot ex-post (no pun intended). 
    Your comment came when there was just a momentary rise above $1T before falling again. Now that the market is closed and AAPL is at a $1T+ valuation we can mark that as a bona fide milestone… with an asterisk, because I'd like to see it be sustainable than simply being part of a blip or bubble. Even though I wholeheartedly agree that Apple is woefully undervalued, the stock market doesn't seem to care about such things.
    It’s funny at how closing is looked at differently from an intraday high, when really, it’s no more important. A closing price is just as ephemeral as the intraday number. It may seem more important, but it lasts just about as long -for the instant of close. Opening discards that number, and begins with a new one.
    randominternetperson
  • Reply 86 of 146
    entropysentropys Posts: 1,160member

    The financial logic behind stock buybacks is simple math.  By definition, fewer outstanding shares means that earning per share goes up, which should mean the value of each share increases.

    Yes, but the total value of the shares remains the same. I look at buybacks as a reduction in outstanding liabilities at best.
  • Reply 87 of 146
    SoliSoli Posts: 7,847member
    melgross said:
    Soli said:
    Soli said:
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina.  


    Get serious here. Petrochina is/was a joke. The stock runup that it had which put it briefly at $1T was a silly little bubble for a commodity company in a nascent Chinese exchange that was having trouble pricing its stocks in its early days. It is at ~25% of that value now, which is closer to its true price.

    The beauty is AAPL is still an undervalued company at this price. It will continue to grow from this level, (in that process, it surely will fall below that number as well, I.e., there will be volatility). It is the first legitimate trillion dollar company. Period. 
    Yes, let's get serious. If we don't count PetroChina's single day blip to $1T USD then why should we could Apple's? How about we save the party favors and rejoicing in the streets until the milestone can be sustained, not just a very brief, inter-day spike in the market?
    Re-read my post. Then try getting serious. 

    In any event, the point is moot ex-post (no pun intended). 
    Your comment came when there was just a momentary rise above $1T before falling again. Now that the market is closed and AAPL is at a $1T+ valuation we can mark that as a bona fide milestone… with an asterisk, because I'd like to see it be sustainable than simply being part of a blip or bubble. Even though I wholeheartedly agree that Apple is woefully undervalued, the stock market doesn't seem to care about such things.
    It’s funny at how closing is looked at differently from an intraday high, when really, it’s no more important. A closing price is just as ephemeral as the intraday number. It may seem more important, but it lasts just about as long -for the instant of close. Opening discards that number, and begins with a new one.
    A solidified value on a given day is inherently better for investor calculations than a micro blip during intraday trading, but you also don't seem to understand why Apple would buy back shares so I'm not sure there's any discussion we can have on this matter despite the well worn financial reasons for recording the closing price of a stock and buying back of shares (and probably even splitting shares).
    edited August 2
  • Reply 88 of 146
    SoliSoli Posts: 7,847member
    Jack Nicas has a good piece in The Times looking back at the last 20 years of Apple history, in light of today’s news. A few landmarks:

    • 1996: Apple’s market cap sunk as low as $3 billion before the NeXT reunification.
    • 2007: Apple was worth $73 billion when Steve Jobs introduced the iPhone.
    • 2011: Apple was worth $346 billion when Tim Cook took the helm as CEO. Apple closed today with market cap of $1.002 trillion.

    That “.002” looks insignificant but represents $2 billion — about what the entire company was worth in 1996.


    So to put this into some other terms, between the time Jobs introduced the iPhone to when he officially stepped away as CEO for the last time (remember he took a hiatus in which Cook took over for awhile) Apple's valuation rose about 4.75x under Jobs in 4 years. In the last 7 years it's only risen 2.90x under Cook. Fire Cook¡
    edited August 2 LukeCagepscooter63
  • Reply 89 of 146
    Soli said:
    Jack Nicas has a good piece in The Times looking back at the last 20 years of Apple history, in light of today’s news. A few landmarks:

    • 1996: Apple’s market cap sunk as low as $3 billion before the NeXT reunification.
    • 2007: Apple was worth $73 billion when Steve Jobs introduced the iPhone.
    • 2011: Apple was worth $346 billion when Tim Cook took the helm as CEO. Apple closed today with market cap of $1.002 trillion.

    That “.002” looks insignificant but represents $2 billion — about what the entire company was worth in 1996.


    So to put this into some other terms, between the time Jobs introduced the iPhone to when he officially stepped away as CEO for the last time (remember he took a hiatus in which Cook took over for awhile) Apple's valuation rose about 4.75x under Jobs in 4 years. In the last 7 years it's only risen 2.90x under Cook. Fire Cook¡
    Assuming this is sarcasm.
  • Reply 90 of 146
    kamiltonkamilton Posts: 257member
    Booyah!  The second trillion is always easier!  

    Evidence that Job’s philosophy, acumen, focus and work ethic should be taught to all.  His team and company continue to stride forward.
    randominternetpersonpalomine
  • Reply 91 of 146
    maestro64maestro64 Posts: 4,180member
    hentaiboy said:
    Man I wish Sog35 was still around. Didn’t he sell all his AAPL stock @ $150?
    He is still around on another site I'm on and still complaining about cook.
    edited August 2 randominternetpersonradarthekatstompypalomine
  • Reply 92 of 146
    SoliSoli Posts: 7,847member
    Soli said:
    Jack Nicas has a good piece in The Times looking back at the last 20 years of Apple history, in light of today’s news. A few landmarks:

    • 1996: Apple’s market cap sunk as low as $3 billion before the NeXT reunification.
    • 2007: Apple was worth $73 billion when Steve Jobs introduced the iPhone.
    • 2011: Apple was worth $346 billion when Tim Cook took the helm as CEO. Apple closed today with market cap of $1.002 trillion.

    That “.002” looks insignificant but represents $2 billion — about what the entire company was worth in 1996.


    So to put this into some other terms, between the time Jobs introduced the iPhone to when he officially stepped away as CEO for the last time (remember he took a hiatus in which Cook took over for awhile) Apple's valuation rose about 4.75x under Jobs in 4 years. In the last 7 years it's only risen 2.90x under Cook. Fire Cook¡
    Assuming this is sarcasm.
    Absolutely. I believe that Cook is not only the exact type of CEO Apple needs at this point, the best CEO alive, the most undervalued CEOs, but also that it's because of Cook that Apple was able to grow as fast and efficiently as it did under Jobs as CEO.


    maestro64 said:
    hentaiboy said:
    Man I wish Sog35 was still around. Didn’t he sell all his AAPL stock @ $150?
    He is still around on another site I'm on and still complaining about cook.
    What?! Really?! What site is that, or what exactly could he be complaining about?
    radarthekatbrucemc
  • Reply 93 of 146
    icoco3icoco3 Posts: 1,443member
    Soli said:
    icoco3 said:
    Soli said:
    icoco3 said:
    chasm said:

    * Technically, the story is incorrect; other companies have reached the $1T valuation before, but I think Apple is the first publicly-traded company to manage it; it is certainly the first on the US stock exchanges to achieve it.
    There were other publicly traded companies that did it. Dutch East India Company...posted about them earlier.  The first US company to do it though from what I could find.

    https://www.fool.com/investing/general/2012/08/22/a-history-of-ridiculously-big-companies.aspx
    You can't count DEIC as being the first company to hit $1T USD because it never happened. They only reach that valuation after adjust for over 300 years of inflation and other metrics.
    Just trying to compare Apples to Apples.  People do comparisons all the time adjusting for inflation.
    Sure, but I didn't see you note that DEIC's valuation is adjusting for 4 centuries of inflation so I read your comment as an unadjusted value. To me, that's a pretty big asterisk.

    DEIC was an impressive—even if horrible and brutal—company. They had about 1.3 centuries of soaring profits before finally faltering, and even that took 70 years before they were dismantled.
    I didn’t mention the adjusted price as it was explained in the linked article.  I consider them a credible source.  At least I cited a source for the figure and didn’t make unsubstantiated claims.

    To your second point, I couldn’t agree more...
    edited August 2
  • Reply 94 of 146
    entropys said:

    The financial logic behind stock buybacks is simple math.  By definition, fewer outstanding shares means that earning per share goes up, which should mean the value of each share increases.

    Yes, but the total value of the shares remains the same. I look at buybacks as a reduction in outstanding liabilities at best.
    Think of it a different way. If Apple succeeds in buying back 50% of it’s peak share count, and you bought shares at that peak share time, then those shares would own twice as much of Apple the company as they did when you bought them. Not only that, but those shares were often bought back at some exceedingly low valuations. It’s as if Apple were investing in AAPL in your stead.
    edited August 2 Solitmayradarthekat
  • Reply 95 of 146
    radarthekatradarthekat Posts: 2,473moderator
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina. 


    Get serious here. Petrochina is/was a joke. The stock runup that it had which put it briefly at $1T was a silly little bubble for a commodity company in a nascent Chinese exchange that was having trouble pricing its stocks in its early days. It is at ~25% of that value now, which is closer to its true price.

    The beauty is AAPL is still an undervalued company at this price. It will continue to grow from this level, (in that process, it surely will fall below that number as well, I.e., there will be volatility). It is the first legitimate trillion dollar company. Period. 
    Publicly traded, yes.  But I think you’d find Aramco to be worth considerably more than $1t if offered up for sale. 

    https://www.google.com/amp/s/www.forbes.com/sites/ellenrwald/2018/08/02/4-comparisons-between-aramco-and-apple-two-trillion-dollar-companies/amp/
    SpamSandwich
  • Reply 96 of 146
    blah64blah64 Posts: 870member
    melgross said:

    seankill said:
    Soli said:
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina. 


    Did PetroChina legitimately get to 1T? Is it even a publicly traded company?
    It happened on their first day of their IPO during a spike. It was sustained for more than a moment, they certainly didn't close that day anywhere near $1T USD, and have been far from it ever since. That's why I don't count this spike as a milestone for Apple until it's sustained, which at least means closing the market with a $1T market cap.

    PS: If not for buybacks Apple would've reached this a long time ago.
    You make the assumption that the share price would have gone to the necessary number to equal 1T without the buybacks; part of Apple’s value is the company’s buybacks. 
    I’ll keep saying it. Buybacks do NOT increase share value by much at all. And most of that is temporary. So, yes, if Apple hadn’t taken about $200 billion off its valuation in buybacks, they would have hit a trillion some time ago. More recently, the buybacks of 43 million shares took off more than $85 billion, going by today’s price. There’s no way that Apple share price rose by that much from those buybacks. The share price rise is from company performance, not buybacks.

    it can be argued that by carrying over $120 billion in debt solely for the purpose of buybacks, and the removal of that amount from the balance sheet has diminished Apple’s worth by the total of the two. - over $240 billion. Now, this quarter, they finally rested some of that debt. That debt, again raised solely for the buybacks, cause Moody and others to downgrade Apple, meaning that further debt cost more.

    i don’t see the value here. Apple could have used some of that for R&D, marketing, investments, etc. Instead, it goes down a black hole as the shares are retired.
    Kind of taking your side here, even though it might not sound like it.  Or at least as compared with some of the other reasoning here...

    The stock appreciation is due primarily to performance.  And indeed, buybacks by themselves don't really increase share value (much), just like stock splits.  If they'd kept the cash on hand instead, then all those billions would still be present in the form of cash on the books, so it's kind of a neutral move, right?  But the problem is, who wants $200 or $300 billion in cash on their books?!  Cash isn't attractive to investors because frankly if we wanted that we could just sell our investments and sit on the cash ourselves -- for free.  Maybe even get a tiny bit of guaranteed interest.

    So what to do with it?  You mention R&D, marketing, investments.  But Apple clearly has more than enough funds for all the R&D they've got planned for the next several years.  They've got FAR more than enough for all the marketing they could possibly spew out over the next several years.  They could potentially make some very large acquisition(s), but those don't happen on a regular schedule, they're extremely difficult to pull off with substantive benefit, and they generally don't really fit into the way Apple runs their business.

    So we're down to investments, and this is key.  How should they invest that cash?

    If they parked it in something super-conservative, that might not even keep up with inflation, let alone please investors.

    If they put it in various high-return, but risky, markets or instruments, then they obviously run the risk of real loss for investors -- and at least in theory that's not their expertise (though I'm sure they have an entire dept to manage their investments, so they should be at least reasonably good at it!).

    Instead, what they're doing is investing in their own company, in their own ability to generate better-than-average returns over the next few years.  And that alone should speak volumes.  Every dollar that they've put into their buybacks so far has generated solid returns, and they're always going to peel out some shares for employees all the time anyway, and this allowed them to essentially buy those shares at a lower rate than they would have had to do otherwise.

    The bottom line is that Apple management considers this the best investment for 10s or even 100s of billions of their own dollars, and that's how we should take this.  None of us has "insider knowledge" (hopefully), so this investment by the company itself should be looked at as the best proxy for that kind of knowledge that we as outsiders can hope to have.  Buybacks aren't necessarily helpful in the way that many people seem to think they are, but they're still a positive.

    edited August 2 SoliGG1palomineJWSC
  • Reply 97 of 146
    radarthekatradarthekat Posts: 2,473moderator
    melgross said:
    Soli said:
    Soli said:
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina.  


    Get serious here. Petrochina is/was a joke. The stock runup that it had which put it briefly at $1T was a silly little bubble for a commodity company in a nascent Chinese exchange that was having trouble pricing its stocks in its early days. It is at ~25% of that value now, which is closer to its true price.

    The beauty is AAPL is still an undervalued company at this price. It will continue to grow from this level, (in that process, it surely will fall below that number as well, I.e., there will be volatility). It is the first legitimate trillion dollar company. Period. 
    Yes, let's get serious. If we don't count PetroChina's single day blip to $1T USD then why should we could Apple's? How about we save the party favors and rejoicing in the streets until the milestone can be sustained, not just a very brief, inter-day spike in the market?
    Re-read my post. Then try getting serious. 

    In any event, the point is moot ex-post (no pun intended). 
    Your comment came when there was just a momentary rise above $1T before falling again. Now that the market is closed and AAPL is at a $1T+ valuation we can mark that as a bona fide milestone… with an asterisk, because I'd like to see it be sustainable than simply being part of a blip or bubble. Even though I wholeheartedly agree that Apple is woefully undervalued, the stock market doesn't seem to care about such things.
    It’s funny at how closing is looked at differently from an intraday high, when really, it’s no more important. A closing price is just as ephemeral as the intraday number. It may seem more important, but it lasts just about as long -for the instant of close. Opening discards that number, and begins with a new one.
    Except that there’s a period of time after the close, and after the aftermarket trading session, that market participants have to digest and integrate thinking about the share price.  And that makes a closing price more significant than an intraday tick.  In the grand scheme neither is very significant, but there are degrees of insignificance and intraday ticks are typically far more insignificant than closing prices. 
    ronn
  • Reply 98 of 146
    tmaytmay Posts: 2,863member
    Soli said:
    Soli said:
    Jack Nicas has a good piece in The Times looking back at the last 20 years of Apple history, in light of today’s news. A few landmarks:

    • 1996: Apple’s market cap sunk as low as $3 billion before the NeXT reunification.
    • 2007: Apple was worth $73 billion when Steve Jobs introduced the iPhone.
    • 2011: Apple was worth $346 billion when Tim Cook took the helm as CEO. Apple closed today with market cap of $1.002 trillion.

    That “.002” looks insignificant but represents $2 billion — about what the entire company was worth in 1996.


    So to put this into some other terms, between the time Jobs introduced the iPhone to when he officially stepped away as CEO for the last time (remember he took a hiatus in which Cook took over for awhile) Apple's valuation rose about 4.75x under Jobs in 4 years. In the last 7 years it's only risen 2.90x under Cook. Fire Cook¡
    Assuming this is sarcasm.
    Absolutely. I believe that Cook is not only the exact type of CEO Apple needs at this point, the best CEO alive, the most undervalued CEOs, but also that it's because of Cook that Apple was able to grow as fast and efficiently as it did under Jobs as CEO.


    maestro64 said:
    hentaiboy said:
    Man I wish Sog35 was still around. Didn’t he sell all his AAPL stock @ $150?
    He is still around on another site I'm on and still complaining about cook.
    What?! Really?! What site is that, or what exactly could he be complaining about?
    "Apple is now $1T away from $2T market cap".

    That's Neil Cybart's view of it from Above Avalon

    SpamSandwichbrucemcpscooter63
  • Reply 99 of 146
    SoliSoli Posts: 7,847member
    tmay said:
    Soli said:
    Soli said:
    Jack Nicas has a good piece in The Times looking back at the last 20 years of Apple history, in light of today’s news. A few landmarks:

    • 1996: Apple’s market cap sunk as low as $3 billion before the NeXT reunification.
    • 2007: Apple was worth $73 billion when Steve Jobs introduced the iPhone.
    • 2011: Apple was worth $346 billion when Tim Cook took the helm as CEO. Apple closed today with market cap of $1.002 trillion.

    That “.002” looks insignificant but represents $2 billion — about what the entire company was worth in 1996.


    So to put this into some other terms, between the time Jobs introduced the iPhone to when he officially stepped away as CEO for the last time (remember he took a hiatus in which Cook took over for awhile) Apple's valuation rose about 4.75x under Jobs in 4 years. In the last 7 years it's only risen 2.90x under Cook. Fire Cook¡
    Assuming this is sarcasm.
    Absolutely. I believe that Cook is not only the exact type of CEO Apple needs at this point, the best CEO alive, the most undervalued CEOs, but also that it's because of Cook that Apple was able to grow as fast and efficiently as it did under Jobs as CEO.


    maestro64 said:
    hentaiboy said:
    Man I wish Sog35 was still around. Didn’t he sell all his AAPL stock @ $150?
    He is still around on another site I'm on and still complaining about cook.
    What?! Really?! What site is that, or what exactly could he be complaining about?
    "Apple is now $1T away from $2T market cap".

    That's Neil Cybart's view of it from Above Avalon
    Yeah, but they're still $999 trillion away from $1quadrillion. Sell! Sell! Sell!
    pscooter63anantksundaram
  • Reply 100 of 146
    radarthekatradarthekat Posts: 2,473moderator
    To those who suggest buybacks have no effect, I’ll add that an often missed benefit of share buybacks is to get the cash off the balance sheet.  With less static cash sitting around each dollar invested in the company means a higher percentage of that dollar invested in ongoing and productive operations (what the P/E and other valuation metrics apply to) with a smaller percentage of that invested dollar merely buying part of a relatively static cash hoard.  Who wants to pay a dollar to get only 70 cents worth of a business and the other 30 cents getting you... 30 cents sitting in Tbills?  So the buybacks, by clearing out excess cash, make the company (and its shares) more attractive to new investors, not just those already holding shares.

    Let me reiterate...  P/E and other valuations measures apply to the ongoing operating business, not to the cash hoard.  If there’s a ton of cash on the books, I nvestor’s know that their invested dollars are not working at full capacity.  They will see that they are paying $1 to get, say, 70 cents of operating business and 30 cents of cash, effectively meaning only 70% of their invested capital is working for them.  Nobody wants their investing capital diluted in this way.  The result is such a company is given a lower P/E and lower values for other metrics that measure against business performance.  And that becomes a drag on share price increases.  A company that carries a 30 P/E that increases its earnings $1/share gets $30 added to its stock price.  Another company that carries a 15 P/E that also raises its earnings per share by $1 gets a $15 increase in its share price.  So a drag on the market’s valuation of the business directly effects share price increases as the business grows.  Having excess cash depresses valuation measures due to the dilution it creates to investors capital.  We can see the result in Apple’s aggressive share buybacks.  The company’s P/E, as one very visible valuation measure, has increased from 12x a few years ago to over 19x today.  And that’s not from explosive growth in profits (the profits are not growing like they were in the first several years of iPhone, at 70%).  The recent P/E expansion is partly related to a more efficient allocation of each invested dollar that folks like you and me and institutional investors use to buy shares.  There are other reasons for valuation metric increases, and one is the growth of services, which tend to net closer to 7x revenue valuations (see Netflix’s P/S number) versus 4x revenue valuations that are typical of product companies.  But the buybacks removing excess cash is also part of valuation metric expansion, no doubt.   And that goes hand in hand with the increase in profits per share that comes from reducing the share count (the most commonly cited and most easily understood catalyst). 
    edited August 2 pscooter63JWSC
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