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Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
- googoobaby 14y ago"But I don’t think Jobs would see much pleasure in winning by such means. I’d instead expect he’d want to win the prize based upon the performance of the company and beat the rest without an asterisk next to the record." What a load of crap. I fully remember when Jobs tried to define NeXT as a if not the leading workstation company by twiddling the definition of workstation to exclude Sun and HP/Apollo.
- CurtHagenlocher 14y agoWhy do people even care? Has consumer culture so overtaken our minds that we identify personally with the things that we buy?
- madrona 14y agoYes.
- Blara 14y agoI think it has been like this for a long time.
- deleted 14y ago[deleted]
- ryannielsen 14y agoI can only speak for myself, but I find facts such as these interesting. And perhaps there's something less negative than "consumer culture" at play… humans are generally curious about and interested in extraordinary things. e.g. Olympic athletes, inordinately successful businesses and business people, brilliant artists, robots landing on other planets, etc.
- ekianjo 14y agoWhen you see people BUYING t-shirts which are blatant advertising of popular brands, then you reach that point where people identify themselves to a brand before all. That has been the case for a LONG time already.
- nitrogen 14y agoSome people buying branded t-shirts may simply prefer the fit and price of a shirt, and don't care what it says on it.
- ekianjo 14y agoSomehow I find it very hard to believe. Remove the logo on the lacoste polo shirt and the Nike shoes and see if they would buy it still.
- weego 14y agoNike Air Pegasus 2 are the best running shoes I've ever had for training, I went through a gait and foot impact test at a sport science clinic to match shoes to my running style. Their combat compression kit is also some of the best you can buy in terms of lasting the year even when used every day. Now if you meant those ridiculous Airs with the spring shocks in them then yes, but brands that endure aren't built on nothing.
- nitrogen 14y agoI'll use myself as a proof by counterexample. When I was buying my t-shirts from places I actually wanted to support, like ThinkGeek, or buying solid colored t-shirts with no logos, I found that the poor fit of the t-shirts was making me look bad and feel uncomfortable. Eventually I was talked into going "shopping" by a couple of female friends (actually, I talked them into being my guide), and found that the only t-shirts I could find that made me look and feel good, with a wide range of prices, also happened to have well-designed corporate logos on them. So, until it becomes technically possible and socially acceptable to have custom-tailored t-shirts that fit perfectly, have the right fabric, pattern, and seam/collar/hem, and are emblazoned with my family crest or personal corporate logo, I will continue to buy whatever looks and fits the best within my price range.
- mdonahoe 14y agoSome people own stock. Others just like stats. How much of the world's brain matter is used up by sports trivia?
- PakG1 14y agoYet another mandatory XKCD: http://xkcd.com/922/ http://xkcd.com/922/
- saraid216 14y agoDerail. Can you actually tell me why identifying personally with the things we buy is a bad thing?
- pedalpete 14y agoThere is a difference between identifying with the things you buy, and the things you buy being your identity. Identifying with Apple because you like x,y,z of their vision/products/services, etc. is one thing. The value of Apple as a public company having an effect on your identity is a completely different monster I think. I wish I could put it into words why it feels so wrong, but hopefully somebody else here can explain the difference.
- tedunangst 14y agoWhen are these numbers ever inflation adjusted? Biggest grossing movie of all time inflation adjusted is still Gone With the Wind, but that didn't really stop people from talking about Titanic or Avatar.
- tolmasky 14y agoWell, funny enough, if you look at the hacker news thread about Avatar hitting 1B, it is in fact discussed (one of the people mentioning it is me). I stand by this, just as with movies: it matters. If not these numbers are completely arbitrary and meaningless. It is equivalent to comparing, numerically, the price of one company in Pesos vs the price of another in Dollars, it would make no sense unless they are both converted into the same unit. In this case, we don't even have to go that far back: even Microsoft's market cap in 1999 (adjusted for inflation) was more. Edit: link http://news.ycombinator.com/item?id=1079716 http://news.ycombinator.com/item?id=1079716
- tedunangst 14y agoOh, I kind of agree, but this just seems like "neener, neener, not the biggest." To take a different angle, computers and electronics have only gotten cheaper since 1967. So maybe Apple should be compared to a deflation adjusted IBM market cap. How would those numbers stack up?
- aik 14y agoI think the main point is that any time value in a monetary unit is measured over time, it is naturally adjusted for inflation. This is done with basically everything. So it's not necessarily a "neener neener" situation, it's applying standard process. I think the real question that is trying to be answered is which company is worth more, period. How do you measure worth? In dollars is one way, making use of the market cap. Which has/has made a larger (positive) impact in the world is another. Which metrics should you use to get to the answer is the question... Adjusting for change of price in goods (your suggestion) is a little shaky of any idea in my mind, as 1. inflation affects all goods instead of a subset, which means there's more choice. 2. IBM must've had it harder since the cost was higher and they still managed such a large market cap, ie. took more value output to create the market cap. Just some thoughts.
- reitzensteinm 14y ago>.... [Apple] would have a value of more than $3 trillion by 2020. As the Times points out, that is bigger than the 2011 gross domestic product of France or Brazil. Comparing an outlandish guess for a 2020 market cap versus a 2012 gross domestic product (a flow of money, not a store) is hand waving, not analysis.
- zhoutong 14y agoIt's a [failing] attempt to make sense of hard figures. Pretty much like 3 times the distance between earth and moon.
- lloeki 14y agoAlso, extrapolating without much explanation means squat. http://xkcd.com/605/ http://xkcd.com/605/
- confluence 14y agoApplies to teenage prodigies too. I should write about the dancing monkey problem sometime.
- Uchikoma 14y agoIndeed. Makes me wonder what France or Brazil are worth.
- Jabbles 14y agoSurely if the journalist actually thought Apple stock would increase in value 6 fold in the next 8 years they'd buy it. (And then put a disclaimer on the article.) If the market shared their opinion then it wouldn't be available to buy at such a low price.
- rmc 14y agoApples and Oranges. The GDP is the income of a country (roughly), the market cap is more than the current annual income of a company. Not at all comparable.
- Dn_Ab 14y ago
- enneff 14y agoIt's gross how much of the article is spent postulating on what Steve Jobs would think. He's gone. It's both irrelevant and disrespectful to put thoughts in his head.
- artursapek 14y agoWell, it's Techcrunch.
- sown 14y agoWhat about what ever entities that went after the Spice islands? Or east india company? I guess they were commissioned from the monarchies or parliment themselves so perhaps they don't count. Perhaps the oil companies of today?
- ximeng 14y agoMost valuable publicly traded company perhaps, see Saudi Aramco: http://blogs.mccombs.utexas.edu/titman/2010/03/01/more-thoughts-on-the-value-of-saudi-aramco/ http://blogs.mccombs.utexas.edu/titman/2010/03/01/more-thoug...
- mpd 14y agoI'm curious where Standard Oil would stand had it not been broken up.
- ximeng 14y ago$1tn according to Wiki http://en.wikipedia.org/wiki/Standard_Oil#Breakup http://en.wikipedia.org/wiki/Standard_Oil#Breakup
- chmars 14y agoPetroChina was actually worth more than one billion USD a few years ago when a-shares became available at the Shanghai Stock Exchange.
- ximeng 14y agoYou mean trillion I think.
- chmars 14y agoIn numbers, I mean 10^12. As a written word, you are right that for most HN readers, trillion is the probably the correct term.
- Luc 14y agoA long-scale billion is a short-scale trillion. How I hate this confusion! http://en.wikipedia.org/wiki/Long_and_short_scales http://en.wikipedia.org/wiki/Long_and_short_scales
- chmars 14y ago
- stickfigure 14y agoHow about this alternative way of measuring the 'value' of a company: Net asset value (including retained earnings) plus the sum of all dividends ever issued, minus total investment capital.
- zhoutong 14y agoThe dividends issued historically are gone, entirely separate from the company. Assets and liabilities can exist in different forms, including tricky ones like depreciation and intangible assets. If such 'value' is accounted for important uses, manipulating it will be much cheaper and easier than manipulating market cap anyway.
- stickfigure 14y agoSure, it's hard to measure the value of assets. But look at it this way: In the long run, every company dies, so assets always go to zero. What investors (in aggregate) are left with is the net sum of dividends paid out. To answer "what is the most valuable company in history" I would look for the company which paid out the most in dividends before it expired. Stock price is largely a measure of which company has managed to attract the most suckers.
- Kroem3r 14y agoDon't know why people would downvote this. It's a pretty good idea of how to measure the value of a company. It's somewhat shy of the true metric which would be along the lines of 'how much better it made the world'. Market cap is appealing because it's trivial. These definitions would also allow comparing non-standard corporations, like churches and states. It seems like this is a natural comparison - it's inevitable that big companies are ranked among comparable countries.
- JumpCrisscross 14y agoMost companies don't trade at book value because net asset value is a bad measure of market value. Getting a mark-to-market assessment on a firm's entire balance sheet is very expensive and still resorts to estimating market value rather than directly sampling it. One could do equity value + discounted payouts - discounted invested capital. This includes payments on debt and possibly taxes. This measure would not be a "value" in an economic sense as valuation is in present terms, incorporating future potential and using the past only to inform assumptions. This measure catalogs a company's time-integrated capital productivity. This could inform a valuation, but taking an extreme case, it would value dearly a shell company that just paid its assets out in a dividend. With the subjectivity complexities like cross-border activity or M&A introduce the exercise has little value beyond the pedagogical.
- nasmorn 14y agoActually to really compare the weight the company had in its days it is more meaningful to compare its market cap to GDP. Wolfram Alpha gives me 852 billion for 1967 so IBMs market cap was approx. 22.5% of that. 2012's estimated GPD is 15.6 trillion thus Apple has a mere 4.2% of that. That was how big IBM really felt back then.
- hollerith 14y agoAm curious why someone downvoted this.
- huxley 14y agoIt's because the linked article double counted inflation: "IBM’s 1967 market cap was not $1.3 trillion in real dollars, it was $192.3 billion"
- hollerith 14y agoThen why not downvote the dozens of other comments that missed the double count?
- microtherion 14y agoI didn't downvote it, but the calculation appears wrong: the $852.7B are nominal 1967 GDP; in 2012 dollars, this would correspond to more than $4T, so IBM was less than 5% of GDP even back then.
- lostlogin 14y agoThat's a great metric. Was trying to measure The East India Company by this metric, but it's surprisingly hard to do so.
- hollerith 14y agoThere was a huge error in the OP as explained in http://news.ycombinator.com/item?id=4411478 http://news.ycombinator.com/item?id=4411478. If we correct the error, we conclude that in 1967, IBM's market cap was approximately 3.3% of US GDP. That seems much more reasonable to me. Although IBM owned much more of the market for computers than Apple does, the role of computers in society has expanded drastically. E.g., there was no consumer computer market at all in 1967. P.S. MSFT’s 1999 high of $620.6 billion represented 6.5% of 1999's US GDP.
- chmars 14y agoA few years ago, PetroChina was worth more than one trillion USD at the Shanghai stock exchange: http://www.marketwatch.com/news/story/story.aspx?guid=%7BA1669F28%2DA9C7%2D43C1%2DAE36%2D61053AD40DE5%7D http://www.marketwatch.com/news/story/story.aspx?guid=%7BA16...
- jcampbell1 14y agoThe article has wrong facts. The columbia journalism review author double counted inflation. The NYTimes piece he cites has already adjusted for inflation in the 1967 IBM Market cap.
- uvdiv 14y agoTrue: CORRECTION: Let me rap myself on the knuckles here for the above update, which was flat incorrect. As commenter JD points out, IBM’s 1967 market cap was not $1.3 trillion in real dollars, it was $192.3 billion. The NYT’s data was already adjusted for inflation. http://www.cjr.org/the_audit/misleading_and_incomplete_cove.php http://www.cjr.org/the_audit/misleading_and_incomplete_cove.... Or, $28 billion nominal.
- rauljara 14y agoThis is by far the most important comment on the page. Very frustrating that, when I read it, it was nowhere near the top.
- giorgiofontana 14y agoI totally agree.
- deleted 14y ago[deleted]
- Bro_Merch 14y agoAgreed
- D_Alex 14y agoRockefeller's Standard Oil was possibly even more valuable - at the time of it's anti-trust mandated breakup it produced around 90% of USA's oil. The companies it split into became Exxon, Mobil, Chevron, Amoco, Conoco, Unilever (!) and a whole bunch of others.
- maxerickson 14y agoI'm playing wiki-facts here, but Unilever bought one of the breakup companies in 1987. The Unilever conglomerate established itself very much without being part of Standard Oil.
- D_Alex 14y agoI checked up and you are quite correct. Unilever bought Ponds which in turn grew out of a vaseline manufacturer previously owned by Standard Oil.
- mmariani 14y agoFor anyone who wanrs the original story here's the link. http://www.cjr.org/the_audit/misleading_and_incomplete_cove.php http://www.cjr.org/the_audit/misleading_and_incomplete_cove.... PS: TechCrunch is somewhat pushy on they iPad app. I wonder if it is because the UX on mobile Safari is not that great.
- bluestix 14y agoCountries are corporations too you know. The United States of America (formerly known as The Virginia Company) is probably bigger then Apple could ever hope to be.
- confluence 14y agoLet me get this out right now: Valuations mean jack shit (companies/houses/startups/humans - whatever). Especially "market caps". Understand this: 21.91 million shares of Apple were traded yesterday. That is $14,460,600,000 moving around. [1] Now you must adjust down for HFT traders, market makers, option hedgers, futures guys and anyone else who trades massive amounts of stock each and every day. My rule of thumb is ~10% actually moves hands (rather than just being moved around). So now we are at $1,460,600,000. Only $1.5 billion dollars actually moved around yesterday. If you had $1.5 billion dollars yesterday you could've controlled the "market cap/valuation" of 1 billion shares and half a trillion in value. You can control the market cap of anything utilising the fact that valuation uses multiplicative leverage on stuff that doesn't exist yet. [2][3] Indeed - all those teengers you see in college at age 11? Way overvalued - come and check back in 10 years. Fallacy of exponential growth runs rampant through most of finance, and teenage "prodigies". [4] Basically with only $1.5 billion you could control the value of $500 billion dollars worth of assets - on any one day - that's it. This is how you get bubbles. This is how you can have stock market booms and busts. Valuation leverage allows you to bid up prices for any stock using less than 2% in actual value, selling to the next tulip buyer whenever they come in trading. [5] If you had to use 100% cash - well there just ain't enough to go around my friends! Startups? Invest $20K just like YC does, valuing a company at $1 million - pre-product and sometimes even pre-team! The million dollars just ain't there yet - but everybody - look yonder - valuation and investor interest over the horizon! Venture Funds? Instagram received a $50 million cash injection which valued it at a cool $500+ million - pre-revenue. $500 million in cash wasn't actually in the coffers (or on the horizon) but Facebook look - just look - at our valuation/predicted growth - you gotta buy us out (with cash of course). And double the price while you're at it. ~2% of the world's value actually exchanged hands yesterday on the world markets. ~0.5% of market participants actually moved the prices that the rest of the world was priced at. Hold ~2% of the world - and control it all. Valuation is bullshit - it's like leverage without the cost of capital. Sources: [1] - https://www.google.com/finance?client=ob&q=NASDAQ:AAPL https://www.google.com/finance?client=ob&q=NASDAQ:AAPL [2] - https://en.wikipedia.org/wiki/Valuation_(finance) https://en.wikipedia.org/wiki/Valuation_(finance) [3] - https://en.wikipedia.org/wiki/Leverage_(finance) https://en.wikipedia.org/wiki/Leverage_(finance) [4] - http://xkcd.com/605/ http://xkcd.com/605/ [5] - https://en.wikipedia.org/wiki/Market_capitalization https://en.wikipedia.org/wiki/Market_capitalization
- rogcg 14y ago"Big Blue still reigns supreme." but.. whatever.. =/
- mp99e99 14y agoThis is a ridiculous article. Its obvious the world is becoming more competitive (ie there are no modern day John Rockefellers adjusted for inflation). What Apple has accomplished is amazing, and I'm not even an Apple fanboy. Credit where credit is due, and Apple hasn't topped -- yet! If you're the top market capitalization company, you're doing something right (especially from where Apple came from). Its like winning gold and saying well you didn't beat the world record so you're gold doesn't count.
- afterburner 14y agoKeep in mind there are other metrics for comparing how "big" a company is: http://en.wikipedia.org/wiki/List_of_companies_by_revenue http://en.wikipedia.org/wiki/List_of_companies_by_revenue http://en.wikipedia.org/wiki/List_of_largest_employers#2012_Fortune http://en.wikipedia.org/wiki/List_of_largest_employers#2012_...