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Is this supposed to be good news? I see lots of excitement in this thread, but isn't having a single company worth so much money a sign that we are, as a societ

Is this supposed to be good news? I see lots of excitement in this thread, but isn't having a single company worth so much money a sign that we are, as a society, failing to create an economy that is truly competitive and fair? We've already got banks that are too big to fail, soon we might have private companies that are humongous to the point of having the same status.

coryfklein 8y ago
Turning that argument around, in a fair and competitive market would it be impossible for a company to grow to a $1T valuation? Do you think the majority of Apple's $1T valuation is attributable to abuse of government regulation or patents?
- petra 8y ago
  We know that networked technology businesses are mono/duopolistic by nature. So even if there are 10 amazing competitors, only 2 will survive, and they will be very protected from future competition. This seems unfair. And yes, that's a big reason behind why Apple is a $1T company.
- _pferreir_ 8y ago
  > in a fair and competitive market would it be impossible for a company to grow to a $1T valuation? It depends on your definition of "fair". In my view, such a market would be regulated as to avoid that companies become too big to the point of turning into black holes that suck everything around them. Money attracts top talent and allows companies to buy out possible competitors. That in turn generates more money.
  - coryfklein 8y ago
    Please explain in what way Apple is "a black hole that sucks everything around it".
    - _pferreir_ 8y ago
      Maybe Apple is not even the best example, but look at Google or Facebook. How many potentially successful competitors have they bought off? How much more diverse could the market be if they hadn't been allowed to do so?
newscracker 8y ago
This is just some sort of milestone that's being published and discussed widely. On the point of a single company being worth so much money, here's a different perspective. One of the many measures of how valuable a company's stock is, is the P/E ratio (price divided by earnings). It just says what multiple of the earnings a buyer of the stock is willing to pay. For Apple, this is now around 20. Take a look at another stock, say Amazon. As of now, it trades at a P/E multiple of 145 and has a market cap just shy of $1 trillion (where Apple is), at $895 billion. If Apple were treated the same as Amazon by the stock market, it would have a market cap of over $7.2 trillion today. If Amazon were treated the same as Apple, its market cap would have to be about $124 billion. Yet, this is where we are. From the "too big to fail" angle, a simplistic analysis based on the above numbers alone would say that Amazon is a lot more leveraged and riskier than Apple is (the latter also has a huge cash pile of more than a couple of hundred billion dollars). So the issue here is not that Apple has reached $1 trillion in valuation, because that's well deserved for a company that makes so much money. The issues exist everywhere in what companies do as larger contributions to society and how they're rewarded by the stock market.

coryfklein 8y ago

Turning that argument around, in a fair and competitive market would it be impossible for a company to grow to a $1T valuation? Do you think the majority of Apple's $1T valuation is attributable to abuse of government regulation or patents?

petra 8y ago
We know that networked technology businesses are mono/duopolistic by nature. So even if there are 10 amazing competitors, only 2 will survive, and they will be very protected from future competition. This seems unfair. And yes, that's a big reason behind why Apple is a $1T company.
_pferreir_ 8y ago
> in a fair and competitive market would it be impossible for a company to grow to a $1T valuation? It depends on your definition of "fair". In my view, such a market would be regulated as to avoid that companies become too big to the point of turning into black holes that suck everything around them. Money attracts top talent and allows companies to buy out possible competitors. That in turn generates more money.
- coryfklein 8y ago
  Please explain in what way Apple is "a black hole that sucks everything around it".
  - _pferreir_ 8y ago
    Maybe Apple is not even the best example, but look at Google or Facebook. How many potentially successful competitors have they bought off? How much more diverse could the market be if they hadn't been allowed to do so?

newscracker 8y ago

This is just some sort of milestone that's being published and discussed widely. On the point of a single company being worth so much money, here's a different perspective. One of the many measures of how valuable a company's stock is, is the P/E ratio (price divided by earnings). It just says what multiple of the earnings a buyer of the stock is willing to pay. For Apple, this is now around 20. Take a look at another stock, say Amazon. As of now, it trades at a P/E multiple of 145 and has a market cap just shy of $1 trillion (where Apple is), at $895 billion. If Apple were treated the same as Amazon by the stock market, it would have a market cap of over $7.2 trillion today. If Amazon were treated the same as Apple, its market cap would have to be about $124 billion. Yet, this is where we are. From the "too big to fail" angle, a simplistic analysis based on the above numbers alone would say that Amazon is a lot more leveraged and riskier than Apple is (the latter also has a huge cash pile of more than a couple of hundred billion dollars). So the issue here is not that Apple has reached $1 trillion in valuation, because that's well deserved for a company that makes so much money. The issues exist everywhere in what companies do as larger contributions to society and how they're rewarded by the stock market.