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

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  • Reply 101 of 146
    SpamSandwichSpamSandwich Posts: 29,509member
    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

    Oh, boy. Cybart must be a joyless bore.
  • Reply 102 of 146
    FolioFolio Posts: 337member
    In Apple’s case, I think buybacks have been prudent. Besides reasons already stated they 1 prevent dilution of employee granted stock options and 2 reduce for perpetuity the $$ paid quarterly in dividends. Is there opportunity cost? Would you have them buy Disney or Time Warner? Nah. Of course, buyouts in themselves can be a horrendous waste if stock price is inflated (see IBM or Gilead Sciences). But with Apple so far so good. It seems Street is finally catching on that Apple is quite different from HP.
    Solitmaypscooter63ronn
  • Reply 103 of 146
    geekmeegeekmee Posts: 263member
    I think the value of Apple in the future is much more important than where the price is today.
  • Reply 104 of 146
    foggyhillfoggyhill Posts: 4,725member
    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.
    Buybacks is exactly that, removing future cash flow (which can be a hell of a lot of money).

    Since stock price is in theory present value of this future cash flow according to rate of return R, Apple saves money by buying those shares if they're internal expected rate of return is higher than the one priced into the shares (Apple thinks its shared are undervalued).
    That's the one time were having insider info can be used to buy stocks, though it's not a person doing the buying so it's  different.

    There is of course the risk that your internal assessment is delusional and that in fact the market had correctly priced the stock. The buyback then is pretty close to useless or even dangerously misguided.
    This has happened often enough, especially near recessions, or when the company's market has fundamentally changed making it vulnerable that buybacks have had a bad name; they have been seen as C suite indulgence. They can be, but not always.


    Of course, they could just not pay dividends in the future and save money that way ;-), but that's something else entirely and the stock would tank for sure.




    edited August 2 Soli
  • Reply 105 of 146
    brucemcbrucemc Posts: 1,419member
    Congratulations to Tim Cook and everyone working at Apple. No company deserves this milestone more!  A great and continuing legacy for Steve Jobs. 

    Let et me know when any other company comes close to $1T at a forward PE of about 15...
    Soli
  • Reply 106 of 146
    brucemcbrucemc Posts: 1,419member
    To Melgross - I understand your view that in general stock buybacks only have a minor, and often temporary, impact on share price.  This is the case with most companies because the buyback is being done as a deliberate strategy to boost the share price. It’s funded by debt in many cases, or by using a substantial amount of earnings / cash.  It is a trade off between investment / R&D / desirable acquisitions and the buyback. 

    Apple is in a unique position, as they have more cash being generated than they need given all aspects of their strategy.  The rest of the cash has to be dealt with. It isn’t a trade off. Apple making an expensive acquisition that is not in DNA / culture / strategy, just because they have the cash, is a much bigger mistake than a buyback. 

    Others have outlined here about the cash on books and investor view, and how a reduced share count, in Apples case, brings more value per share for future cash flows. 
  • Reply 107 of 146
    palominepalomine Posts: 357member
    Mixed feelings here, lol.  Sold in after hours of earnings call. Which cost me 40kin lost profit today, but hey, there’s a lot more still unsold. 
    ‘I thought since they didn’t meet the # phones sold and lower macs sold plus upcoming slow qtr the stock would just go back down.
    very glad the hedge fund guys lost money today. What about “the law of large numbers” again?? Giggle.

    feels great to be validated on buying it and holding for so long while the market played silly games with it.
  • Reply 108 of 146
    melgrossmelgross Posts: 30,642member
    JWSC said:
    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.
    Again, there’s no evidence for the efficacy of buybacks. Apple started this mostly because an investor, we all know who he is, pt]retty much forced them to, and then sold his investment anyway.
    ronn
  • Reply 109 of 146
    tmaytmay Posts: 2,863member
    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

    Oh, boy. Cybart must be a joyless bore.
    Nah, he's making a point; corporations don't rest on their laurels..
  • Reply 110 of 146
    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/
    Nonsense. We’ll see, if/when they go up for sale. 

    Theres a reason they’ve shelved their sale. 
    ronn
  • Reply 111 of 146
    tallest skiltallest skil Posts: 43,338member
    danvm said:
    Apple is the first US company with $1T valuation, and second worldwide, behind PetroChina.  
    Yes, I certainly trust Chinese stock report numbers, just like I trust every other number from the Chinese government–which, if you’ll remember, only exists because the US still uses the Bretton Woods system. And we’re not going to anymore.
    SpamSandwich
  • Reply 112 of 146
    melgrossmelgross Posts: 30,642member
    icoco3 said:
    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...

    JWSC said:
    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.
    Again, there’s no evidence for the efficacy of buybacks. Apple started this mostly because 
    ronn
  • Reply 113 of 146
    crapdaycrapday Posts: 21member
    crapday said:
    I am verklempt. 

    Consider that the company was nearly bankrupt 20 years ago. Jobs is surely smiling up there today. 
    I think he may have been an atheist or possibly a Buddhist...

    UPDATE:  Buddhist
    God will accept everyone.
    easily done when it’s make believe. 
    Well make-believe you're a tree and leaf. 

    BTW it was a joke. 
  • Reply 114 of 146
    chasmchasm Posts: 702member
    While profitability is not the focus of every person who comments here, the bottom line is that profitability is what allows Apple the freedom to take risks, do the innovative research, and otherwise continue to make a better overall experience than any of its competitors. Jobs was incredibly prescient in picking Cook to lead the company at the point it did: it had ceased being a small band of outsiders and was now a corporate powerhouse with influence far in excess of its sales.

    Cook would be the first to say he's not a visionary, but that's not to say he's without vision: his job is to reinforce the principles Steve laid down (check), keep the company financially strong (check), and acquire new users through repeated demonstrations of those values (check). He's doing the job very well: Apple was valued at a little over a third of its current valuation when Cook formally took over in 2011, and the message that Apple is among a very small group of tech companies that deserve any measure of your trust is finally starting to sink in. Then there's those incredible customer-sat numbers, and -- despite a bunch of naysayers around here -- the fact that company is nimbly and intelligently producing high-quality, durable products that customers love using.

    The reason this milestone is so important is not because Apple has taken revenge on the Michael Dells of this world, it's because it did it by focusing on customers, making great stuff, and doing that without harvesting your personal data (i.e., literally leaving money on the table).
    edited August 3 melgrosspalomine
  • Reply 115 of 146
    melgrossmelgross Posts: 30,642member
    Again, I’m having problems posting. For example, I can’t get rid of the partial post, #112, which is a partial answer to an answer to a post already posted by me in post #108.
  • Reply 116 of 146
    damonfdamonf Posts: 210member
    The day after its stock hit the $200 mark, Apple became the first $1 trillion U.S. company in history, beating Amazon to earn the first 12-figure company valuation in the history of business.
    You meant “13-figure”, right? A 1 and twelve zeros is 13 digits. 
  • Reply 117 of 146
    blah64blah64 Posts: 870member
    melgross said:
    Again, I’m having problems posting. For example, I can’t get rid of the partial post, #112, which is a partial answer to an answer to a post already posted by me in post #108.
    That's what happens when you try to post from your samsung tablet....  ;-)

    .

    .

    .

    .

    !!!! I'M KIDDING !!!!

  • Reply 118 of 146
    blah64blah64 Posts: 870member
    melgross said:
    JWSC said:
    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.
    Again, there’s no evidence for the efficacy of buybacks. Apple started this mostly because an investor, we all know who he is, pt]retty much forced them to, and then sold his investment anyway.
    Sure, he-who-must-not-be-named (are we not naming him here? fine by me) made a lot of noise and helped influence Apple to start their buybacks, but that influence is long gone and Apple is still strongly on board with the general plan.

    We may be down to splitting hairs, because I agree with your statement "there's no evidence for the efficacy of buybacks" from a technical standpoint.  It's just shifting money and share price around.  That shifting doesn't make the shares more valuable or attractive.

    That said, if Apple's management is doing this for the right reasons - as the best place they can park this many $Billions as an investment because they feel positive about the direction and potential of the company overall - then it's still a good thing, both for Apple and for investors.  Apple essentially gets the benefit of their own stock appreciation, as do investors.

    If AAPL or the market in general goes into a long slide downward and Apple's management continues on the buyback plan then I'll join the "this is a bad idea" crowd.  But they've clearly benefited Apple over the past few years.  Think about the entry prices on all the previous buybacks compared with the share price today!

    I think about it like this: buybacks aren't the engine, they don't drive share price up.  And I think this is what you're saying and I completely agree.  But if the train is moving in the right direction, buybacks are like hitching onto the train and taking advantage of it. 

    Besides, at some point it's ridiculous to keep hoards of cash.  I don't actually like the "net cash neutral" goal, I think they should keep a war chest around, maybe 5% of market cap.  But it makes no sense to carry something on the order of 30% of your market cap in cash, especially for a company the size of Apple, and the buybacks have been an awesome investment of that cash.

  • Reply 119 of 146
    gatorguygatorguy Posts: 18,896member
    blah64 said:
    melgross said:
    JWSC said:
    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.
    Again, there’s no evidence for the efficacy of buybacks. Apple started this mostly because an investor, we all know who he is, pt]retty much forced them to, and then sold his investment anyway.


    That said, if Apple's management is doing this for the right reasons - as the best place they can park this many $Billions as an investment because they feel positive about the direction and potential of the company overall - then it's still a good thing, both for Apple and for investors.  Apple essentially gets the benefit of their own stock appreciation, as do investors...
      But it makes no sense to carry something on the order of 30% of your market cap in cash, especially for a company the size of Apple, and the buybacks have been an awesome investment of that cash.

    I wouldn't define it as an Apple investment since there's zero residual value on the books when it's done. The stock is retired. Gone. Burned. 
    edited August 4
  • Reply 120 of 146
    SoliSoli Posts: 7,847member
    gatorguy said:
    blah64 said:
    melgross said:
    JWSC said:
    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.
    Again, there’s no evidence for the efficacy of buybacks. Apple started this mostly because an investor, we all know who he is, pt]retty much forced them to, and then sold his investment anyway.


    That said, if Apple's management is doing this for the right reasons - as the best place they can park this many $Billions as an investment because they feel positive about the direction and potential of the company overall - then it's still a good thing, both for Apple and for investors.  Apple essentially gets the benefit of their own stock appreciation, as do investors...
      But it makes no sense to carry something on the order of 30% of your market cap in cash, especially for a company the size of Apple, and the buybacks have been an awesome investment of that cash.

    I wouldn't define it as an Apple investment since there's zero residual value on the books when it's done. The stock is retired. Gone. Burned. 
    1) An investment can defined as achieving a material result, but it doesn't have to be directly or immediately. This is why stock splits are done even though the value of the company isn't directly or immediately affected by the split.

    2) As I recall, they're not retiring all of it. I don't know the percentage, but a portion of it does go towards employee stock options.
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