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The share price of Apple Inc. (NASDAQ:AAPL) closed at $122.02 today. Why is that a big deal? Well, it was in the mid-1970s when Apple was just an idea that some people thought was insane. Co-founder Ron Wayne sold his 10% share for $800 not long after the company had come into existence. As I have shared in an earlier post, I was living in California in 1984, not far from Apple’s headquarters in Cupertino. I couldn’t wait to be employed by a company that was going to be one of the very first recipients of the first production run of Apple PCs with their amazing WYSIWYG computing capabilities. Still, critics said that Apple would never amount to much.
Fast forward to today. Lets do a little multiplication.
5,820,000,000 shares outstanding x $122.02 per share = $710,156,400,000
That is what Apple’s market cap was when the NASDAQ closed today.
Let’s put a little perspective on that. Apple has now become the first company ever to have a market cap in excess of $700 billion.
I don’t know about you, but I lose a bit of perspective when I start thinking about how big a company is in terms of billions of dollars of market value. It usually helps me to compare it to something else. For a good part of my life ExxonMobil (NYSE:XOM) had been the largest company in the world when measured by market capitalization. Apple passed it for the first time in 2011, making ExxonMobil the second-largest company. The two jockeyed back and forth for a brief while, but here is the kicker: XOM’s market cap today – still in second place – is a “mere” $382.33 billion. Apple’s value is almost double ExxonMobil’s and, according to Tim Cook, Apple’s CEO, the company is still gaining traction.
Cook said today that, “We want one seamless kind of life. And so, I think that is huge for our future. We’ve taken (the mobile operating system) iOS and extended it into your car, into your home, into your health. All of these are really critical parts of your life.” Not to mention that Apple is enjoying enormous receptivity and success in China, where, once again, critics said that angels feared to tread. Angles? maybe. Apple? No fear. Apple sales in China grew by a factor of 70% during Q1 of FY 2015. Five years ago, the company sold $1 billion of product in China for the year. In FY 2014, it sold $38 billion worth.
It was just two weeks ago (27 January) that Apple report a record first quarter for both revenue ($74.6 billion) and net profit ($18 billion), including a two percentage point increase in gross margins. The company is projecting revenue between $52 billion and $55 billion for the second quarter.
With new products like the Apple watch debuting soon, it is hard to imagine how much more Apple can grow. Of course, that’s nothing new. Remember Ron Wayne? I mentioned him in the first paragraph. Had he not sold his shares, his 10% stake would now be more than $7 billion.
So much for those who won’t believe. According to Tim Cook, it’s not too late to get on board.
