6 ms·

103BN is more than a GDP of entire countries. This is just mind blowing.

charlesdm 9y ago
What is mind blowing is that even $103bn is not a lot of money in the grand scheme of things. $100m isn't even a rounding error in the global economy. AB Inbev, a beer company, also recently paid $100bn to acquire their main competitor. That puts into perspective how reasonable it is to expect to be able to make $10-20-50m building and running a business.
- skinnymuch 9y ago
  AB InBev growth and mergers is astounding. The number of companies that form the [original base] of the company is insane. To be fair to AB InBev, they had to give up substantial portiona of SABMiller to get the merger through which as you said was a $100B+ [cash] deal. Combined company revenue is supposed to rise by around $11B this year. While SABMiller did $19B in revenue alone before the merger. SABMiller sold off at least $25B of the company before or during the merger. Not always for the best price either as all sides knew the sales had to happen.
  - charlesdm 9y ago
    Honestly, I think Inbev is one of the most interesting cases when it comes to wealth building. Interbrew was a merger of small(er) Belgian breweries, run mainly by old money aristocratic families. And they basically levered and merged their way up, into a global player worth hundreds of billions in market cap.
    - skinnymuch 9y ago
      Definitely. It's like a handful of Belgian families and the Brazilians at 3G owning a majority of the company still after all this time. Amazing.
- Synaesthesia 9y ago
  I don’t see at all how it makes it reasonable that a person should earn that much running a business at all. Maybe it’s reasonable to the board of that company but I don’t consider it reasonable.
  - jdmichal 9y ago
    I think you interpreted the comment wrong. Of course it's not reasonable for them to expect that money to just show up. But it's perfectly reasonable for them to expect that they could capture that much business. Because there's a lot of money flowing all the time, and 50 million is really a very small portion of it.
tonmoy 9y ago
GDP is a measure of everything produced in a country per year. It makes no sense to compare the value of a company with growth per year.
- 6502nerdface 9y ago
  Of course you can compare a rate with a quantity. GP is saying that whole countries take more than a year to create one (proposed) Qualcomm’s worth of value. Have you never compared your car’s gallon-per-mile rate of fuel consumption with its gas tank’s size in gallons?
  - inopinatus 9y ago
    I haven't. The operation I suspect you're thinking of is division, not comparison. Division of capacity by consumption gives range, whilst a comparison leaves me scratching my head for a meaningful interpretation. I'm afraid this analogy appears to reinforce the point rather than challenge it.
- adventured 9y ago
  Well if you're going to try to be technical about it, GDP does not represent growth per year. GDP also does not specify that it must refer to a year of time, you have to qualify that. GDP is also frequently measured quarterly. It makes sense to relate to GDP if what you're looking for is a well understood scale to use as a reference for very large financial numbers.
  - tonmoy 9y ago
    Since the GP did not mention a time frame I assumed yearly (otherwise it would be most countries instead of some). And when you compare GDP with a the value of a company it sounds like “company X is more valuable than country Y” to most people. I was just trying to mention that this is not the case.
- Shikadi 9y ago
  But by that logic, it makes no sense to compare the cost of a new computer to the cost of rent, because they're different things. GDP is a measure in units of money, and so is stock value, so you can compare them just fine even though they're not related to each other.
jmh530 9y ago
You're confusing a stock and a flow. GDP is a measure of value-added per period. That's a flow. The value of a company is a stock. More comparable to the wealth of a country than its GDP.
- adventured 9y ago
  First, that's not necessarily the case (that they're confused), the parent may simply be referring to that number for scale purposes. Second, what they said is correct on an annual basis. The value of that merger, at $103 billion, exceeds the annual GDP of numerous nations. Before you make an absolute statement about their confusion, perhaps you should ask for clarification first. What they said was not strictly wrong. The economic output of an entire nation can be useful for such comparisons when you're attempting to relate to very large financial figures.
  - dalbasal 9y ago
    Sheesh.. pedantry on HN can be harsh. I remember sparking about 15 cranky comments for calling Milton Friedman “on the Austrian side of economics.” But, can’t beat em, join em. Qualcomm is basically Estonia. Qualcomm’s revenue multiple is about 4.25X. Using that multiple, Estonia should have a similar valuation. Qualcomm has the higher growth rate, but Estonia has been a country for a while with a loyal customer base. Qualcomm’s customers will probably use whatever chips come wired into their phone. Estonia’s are likely to stay Estonian unless a disruptive innovator comes along with a 10X improvement. 10X, not 10%. Think big Putin. If we weigh these against each other, it’s about even. So… Estonia’s National valuation is about $103.4, based on $24bn in gross stuff (yuck). Just kidding!. That’s preposterous of course. Qualcomm is investor backed, Like Tesla. Estonia is debt backed, like a country. You can’t compare those either, and you’d know this if you read all the cranky HN pedantry from before! Someone tried to compare Tesla to GM, the fool! What we need is Estonia’s enterprise value…. Now, that’s apple’s to apple’s. Also, Russia, NATO and stuff.
    - nickik 9y ago
      You simply said something that was flat out wrong, that does not people were 'cranky'.

What is mind blowing is that even $103bn is not a lot of money in the grand scheme of things. $100m isn't even a rounding error in the global economy. AB Inbev, a beer company, also recently paid $100bn to acquire their main competitor. That puts into perspective how reasonable it is to expect to be able to make $10-20-50m building and running a business.

skinnymuch 9y ago
AB InBev growth and mergers is astounding. The number of companies that form the [original base] of the company is insane. To be fair to AB InBev, they had to give up substantial portiona of SABMiller to get the merger through which as you said was a $100B+ [cash] deal. Combined company revenue is supposed to rise by around $11B this year. While SABMiller did $19B in revenue alone before the merger. SABMiller sold off at least $25B of the company before or during the merger. Not always for the best price either as all sides knew the sales had to happen.
- charlesdm 9y ago
  Honestly, I think Inbev is one of the most interesting cases when it comes to wealth building. Interbrew was a merger of small(er) Belgian breweries, run mainly by old money aristocratic families. And they basically levered and merged their way up, into a global player worth hundreds of billions in market cap.
  - skinnymuch 9y ago
    Definitely. It's like a handful of Belgian families and the Brazilians at 3G owning a majority of the company still after all this time. Amazing.
Synaesthesia 9y ago
I don’t see at all how it makes it reasonable that a person should earn that much running a business at all. Maybe it’s reasonable to the board of that company but I don’t consider it reasonable.
- jdmichal 9y ago
  I think you interpreted the comment wrong. Of course it's not reasonable for them to expect that money to just show up. But it's perfectly reasonable for them to expect that they could capture that much business. Because there's a lot of money flowing all the time, and 50 million is really a very small portion of it.

tonmoy 9y ago

GDP is a measure of everything produced in a country per year. It makes no sense to compare the value of a company with growth per year.

6502nerdface 9y ago
Of course you can compare a rate with a quantity. GP is saying that whole countries take more than a year to create one (proposed) Qualcomm’s worth of value. Have you never compared your car’s gallon-per-mile rate of fuel consumption with its gas tank’s size in gallons?
- inopinatus 9y ago
  I haven't. The operation I suspect you're thinking of is division, not comparison. Division of capacity by consumption gives range, whilst a comparison leaves me scratching my head for a meaningful interpretation. I'm afraid this analogy appears to reinforce the point rather than challenge it.
adventured 9y ago
Well if you're going to try to be technical about it, GDP does not represent growth per year. GDP also does not specify that it must refer to a year of time, you have to qualify that. GDP is also frequently measured quarterly. It makes sense to relate to GDP if what you're looking for is a well understood scale to use as a reference for very large financial numbers.
- tonmoy 9y ago
  Since the GP did not mention a time frame I assumed yearly (otherwise it would be most countries instead of some). And when you compare GDP with a the value of a company it sounds like “company X is more valuable than country Y” to most people. I was just trying to mention that this is not the case.
Shikadi 9y ago
But by that logic, it makes no sense to compare the cost of a new computer to the cost of rent, because they're different things. GDP is a measure in units of money, and so is stock value, so you can compare them just fine even though they're not related to each other.

jmh530 9y ago

You're confusing a stock and a flow. GDP is a measure of value-added per period. That's a flow. The value of a company is a stock. More comparable to the wealth of a country than its GDP.

adventured 9y ago
First, that's not necessarily the case (that they're confused), the parent may simply be referring to that number for scale purposes. Second, what they said is correct on an annual basis. The value of that merger, at $103 billion, exceeds the annual GDP of numerous nations. Before you make an absolute statement about their confusion, perhaps you should ask for clarification first. What they said was not strictly wrong. The economic output of an entire nation can be useful for such comparisons when you're attempting to relate to very large financial figures.
- dalbasal 9y ago
  Sheesh.. pedantry on HN can be harsh. I remember sparking about 15 cranky comments for calling Milton Friedman “on the Austrian side of economics.” But, can’t beat em, join em. Qualcomm is basically Estonia. Qualcomm’s revenue multiple is about 4.25X. Using that multiple, Estonia should have a similar valuation. Qualcomm has the higher growth rate, but Estonia has been a country for a while with a loyal customer base. Qualcomm’s customers will probably use whatever chips come wired into their phone. Estonia’s are likely to stay Estonian unless a disruptive innovator comes along with a 10X improvement. 10X, not 10%. Think big Putin. If we weigh these against each other, it’s about even. So… Estonia’s National valuation is about $103.4, based on $24bn in gross stuff (yuck). Just kidding!. That’s preposterous of course. Qualcomm is investor backed, Like Tesla. Estonia is debt backed, like a country. You can’t compare those either, and you’d know this if you read all the cranky HN pedantry from before! Someone tried to compare Tesla to GM, the fool! What we need is Estonia’s enterprise value…. Now, that’s apple’s to apple’s. Also, Russia, NATO and stuff.
  - nickik 9y ago
    You simply said something that was flat out wrong, that does not people were 'cranky'.