Revealed: the world's most valuable firm

By Press Association , Aug 20, 2012
Filed under: Investing

Apple has become the world's most valuable company, ever.

Its surging share price propelled its value to 621 billion dollars (£395 billion), beating the record for market capitalisation set by Microsoft in the heady days of the internet boom.

Apple's shares have hit new highs recently because of optimism around what is believed to be the impending launch of the iPhone 5, and possibly a smaller, cheaper iPad.

Apple has been the world's most valuable company since the end of last year. It is now worth 53% more than No. 2 Exxon Mobil.

The comparison to Microsoft does not take inflation into account. In inflation-adjusted dollars, the software giant was worth about 850 billion dollars on December 30, 1999 (£541 billion). Microsoft is now worth 257 billion dollars (£163 billion).

Apart from the iPhone and "mini iPad," analysts are speculating that Apple plans to make a TV set to complete its suite of consumer electronics products.

China's largest oil company, PetroChina, was briefly worth 1 trillion dollars after it listed on the Shanghai stock exchange in 2007, but only based on its price on that exchange. Its shares also trade in Hong Kong and on the New York Stock Exchange. Based on trading there, its market capitalisation never went as high as 500 billion dollars.

The Motley Fool is an AOL Partner

Tags: Apple, business, Investing, news, profits

Add a Comment

Sign in »

2 Comments

Filter by:

Terry

As with all businesses there is an extrinsic value and an intrinsic value. A large fraction of Apple is extrinsic because we expect them to launch blockbuster products year in year out. We anticipate a new higher net worth and pay the premium. Good chance that they will continue to change the world.
They were founded by amateur radio enthusiasts and many of their engineers enjoyed the hobby over the decades. It's true of many pioneering firms globally and particularly in California and Japan.
So next time your Amateur Radio neighbour wants to put up a special aerial, please give him a break and not whinge to the council. He may just be inventing another Apple opportunity here in UK. Radio amateurs change the world so help them to help the nation.

August 20 2012 at 8:39 PM Report abuse Permalink rate up rate down Reply

jasteeden

The value of any profit making organisation is its ability to generate future profit.
The value is calculated by adding up several years expected future profit / (dividends) depending on the industry sector average, then "discounting" the cash flows to their present worth.
In principle this is pretty straightforward but in practice very difficult. This is due to the inherent problems of finicky customers and natural disasters, legal developments, consumer fashion changes, etc, etc, etc.. Future profit is more unlikely to hit forecast the further ahead you project.
Therefore the value of any profit making organisation at any time is mostly subjective.
This is why the stock market fluctuates to such a large extent (notwithstanding illegal manipulation )
and should be avoided by investors who do not have a thorough grounding in its machinations.
Many, many attempts have been made over the years to model, or calculate the likely movements in share prices of listed companies and groups of similar companies with an almighty differing degree of success.
So the present value of Apple is subjective and will not be in any way the " true " value.
Just todays favourite.

August 20 2012 at 7:06 PM Report abuse Permalink rate up rate down Reply