Apple Shares Reach New All-Time High, But Saudi Aramco to Overtake as World's Most Valuable Company

[MacRumors]

Apple shares crossed the $269 mark in intraday trading today, setting a new all-time high for the company.

However, oil giant Saudi Aramco is set to overtake Apple as the world's most valuable company based on market cap after raising $25.6 billion in the world's biggest initial public offering ever, according to Reuters. The shares are expected to begin trading on the Saudi stock market on December 11.

Saudi Aramco only offered a 1.5 percent stake in the company to public shareholders, so the $25.6 billion raised gives it an overall valuation of around $1.7 trillion, topping Apple's market cap of around $1.1 trillion.

Article Link: Apple Shares Reach New All-Time High, But Saudi Aramco to Overtake as World's Most Valuable Company

 

[Falhófnir]

Haven't Microsoft already dethroned them (on and off) for several months? There was at least one week over the last couple of months where MSFT was the only $1T+ company as AAPL had slipped back down into the mere $9xx Billion range! ?

 

[maflynn]

I'm more interested in what products Apple makes, then their place in some valuation. Seems more like a **** waving contest more then anything.

 

[Andres Cantu]

Great, just what Tim Cook needs to see...

 

[KrisLord]

Whilst the 1.7Bn valuation is interesting, I don’t think it’s realistic to value the company based on 1.5% equity.

If the remaining 98.5% was available, would they have been able to find investors to buy the stock? I doubt it.

 

[GeoStructural]

Haven't Microsoft already dethroned them (on and off) for several months? There was at least one week over the last couple of months where MSFT was the only $1T+ company as AAPL had slipped back down into the mere $9xx Billion range! ?

Yes, and also adjusted values give 90s Microsoft the win anyway.

 

[PickUrPoison]

<snip>
Saudi Aramco only offered a 1.5 percent stake in the company to public shareholders, so the $25.6 billion raised gives the oil giant an overall valuation of around $1.7 trillion, topping Apple's market cap of around $1.1 trillion.

Apple shares are currently hovering around a 52-week high of $268.60.

$1.2 trillion but who’s counting...

 

[Falhófnir]

Yes, and also adjusted values give 90s Microsoft the win anyway.

This sort of thing always just makes me think of this clip: ?

Spoiler: Video

Whilst the 1.7Bn valuation is interesting, I don’t think it’s realistic to value the company based on 1.5% equity.

If the remaining 98.5% was available, would they have been able to find investors to buy the stock? I doubt it.

Reminds me of that diamond planet being valued at '$30 Nonillion' - only it wouldn't be because dumping that much diamond into the market would just make it worthless!

 

[rick3000]

The Saudi Aramco valuation is a joke. They wanted a 2 trillion valuation and no US or European bank would give it to them (most say it's worth closer to 1 trillion), so they listed in their own country. They even changed the lending limits so that people in Saudi Arabia could borrow double the usual limit to to buy shares.

 

[Lesimac]

Whilst the 1.7Bn valuation is interesting, I don’t think it’s realistic to value the company based on 1.5% equity.

If the remaining 98.5% was available, would they have been able to find investors to buy the stock? I doubt it.

Why woul you want to invest in oil when most the world’s car manufacturers are going electric. Seems short sighted to me.

 

[willmtaylor]

Enshallah.

A joke evaluation regardless.

They had no wasta, so they stayed in house.

 

[Baymowe335]

Anyone seen oil prices lately?

I'd rather own AAPL.

Plus, Aramco is a state-owned monopoly.
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Yes, and also adjusted values give 90s Microsoft the win anyway.

90s Microsoft was a valuation anomaly based on the times.

Apple is not only worth more today, but it is far more profitable than MSFT. I am long both, but Apple is the clear winner on the cash generation/valuation metrics.

 

[IPPlanMan]

Apple stock alone has made me a rich person!

If Tim is in it for the money, then so am I.

 

[SVTmaniac]

Why woul you want to invest in oil when most the world’s car manufacturers are going electric. Seems short sighted to me.

There are far more uses for oil than just automobiles. And the percentage of electric vehicles to internal combustion is miniscule. Oil isn't going anywhere in our lifetime.

 

[Constable Odo]

I can already see the financial headlines:
Apple is quickly overtaken by Saudi Aramco in overall value! Tim Cook not doing his job. Apple is doomed.

I'm just thinking that when this IPO takes place, the country is going to be flooded with even more people commonly driving around in Lamborghinis, Porsches, Ferraris, and Bugattis. Damn, that is going to be very sweet for those people. I'm an American and those Saudi Arabians are making Americans look downright poverty-stricken. I'm having a hard time wrapping my head around how so many people can have so much money to burn on supercars and hypercars. More power to them.

 

[timber]

Railroad companies probably were also worth a lot around 100 years ago.

 

[AustinIllini]

This would never have happened if Steve were in charge

 

[Constable Odo]

There are far more uses for oil than just automobiles. And the percentage of electric vehicles to internal combustion is miniscule. Oil isn't going anywhere in our lifetime.

Although you're right about oil not going away, I think if we ever do crack the puzzle of nuclear fusion, oil's value would take a huge hit. I have my fingers crossed that ITER might be the answer to the world's power shortages. But meanwhile, the Saudis will be strutting around like Americans used to do before they got dethroned as the wealthiest mofos on the planet.

 

[justperry]

There are far more uses for oil than just automobiles. And the percentage of electric vehicles to internal combustion is miniscule. Oil isn't going anywhere in our lifetime.

Wait and see, if in the next decade new battery tech comes out which will dwarf Lithium ion batteries in capacity, cost and much faster charging time oil will definitely become too expensive as fuel for cars.
Yes, oil is used in many other applications as well, like plastics and lubricants but I am sure the majority of the output currently is for powering cars/machines.

 

[Mosey Potter]

Apple stock alone has made me a rich person!

If Tim is in it for the money, then so am I.

Word to the wise, Apple, like virtually every corporation out there, has been taking out low interest loans and epic tax cuts to buy back their own stock for over ten years now, thus artificially boosting share values. It’s great that you have made money from this corporate led, market wide Ponzi scheme (I too have benefited). You just don’t want to be stuck holding shares when the inevitable correction occurs. When that event will happen is anyone’s guess, but happen it will, and many will be caught unawares and will be in great pain financially.

 

[timborama]

Why woul you want to invest in oil when most the world’s car manufacturers are going electric. Seems short sighted to me.

You think oil is only used to produce fuel for vehicles??

 

[Gasu E.]

Whilst the 1.7Bn valuation is interesting, I don’t think it’s realistic to value the company based on 1.5% equity.

If the remaining 98.5% was available, would they have been able to find investors to buy the stock? I doubt it.

It's a very interesting topic. Boiling down your assertion via Econ 101, you are saying Supply/Demand applies to a percentage of equity offering-- that is, the more stock that is offered, the lower the price would be. However, the counterargument is that stock is technically a claim on the future profits of the firm: here, they are offering investors the rights to 1.5% of future profits; if they issues 10x as much stock, they would be selling investors the rights to 15% of the profits, which should be worth 10 times as much. So, it's a linear relationship, and the total equity is represented fairly reasonably by the market price of a small bit of the equity.

Unless you literally meant they wouldn't find investors to buy the stock at all. Of course, that would be totally incorrect, as the public stock market is liquid and there are always investors; it's just a matter of price. But I'm assuming you didn't actually mean that.

 

[Baymowe335]

Word to the wise, Apple, like virtually every corporation out there, has been taking out low interest loans and epic tax cuts to buy back their own stock for over ten years now, thus artificially boosting share values. It’s great that you have made money from this corporate led, market wide Ponzi scheme (I too have benefited). You just don’t want to be stuck holding shares when the inevitable correction occurs. When that event will happen is anyone’s guess, but happen it will, and many will be caught unawares and will be in great pain financially.

If any company justifies their valuation, it's Apple. They have the earnings to back up a 1.2T valuation. It is not an expensive stock, amazingly.

GOOGL, MSFT, FB, AMZN, etc are all more expensive.

Corrections come, but this isn't the 1990s of tech. Only AMZN has a somewhat insane valuation of the companies I mentioned.

To even mention "Ponzi scheme" in the same sentence as these great companies is completely irresponsible. This isn't Enron.

Low interest rates have created a unique situation where companies can borrow cheap money to buyback shares, but this is just math. It was cheaper to do that than to use the overseas cash, so they did it. Fiscally responsible. When the tax laws changed, they used their cash. Buying back shares also makes sense at the right price. Warren Buffett, the greatest investor of all time, likes buybacks too.

Apple and other companies make real cash. This isn't a mirage.
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Railroad companies probably were also worth a lot around 100 years ago.

BNSF is still worth a lot. Berkshire paid $44B for it 10 years ago.

 

[PickUrPoison]

<snip>
Unless you literally meant they wouldn't find investors to buy the stock at all. Of course, that would be totally incorrect, as the public stock market is liquid and there are always investors; it's just a matter of price. But I'm assuming you didn't actually mean that.

I think that’s what he meant—that if they “flooded” the market with the other 98.5% of shares, the share price would be driven down.

I think your view that the share price of the latest investment implies the post-money valuation of the whole is the correct analysis.

But from a supply/demand standpoint I can understand the intuitive thought of OP that if SA tried to sell 65x more shares, the share price wouldn’t/couldn’t hold. (And it might very well be true in practice; could they find a buyer at $269 for 100% of the shares? Who knows.)

 

[DocMultimedia]

Apple stock alone has made me a rich person!

If Tim is in it for the money, then so am I.

Yeah, I was lucky that I invested in Apple starting back in 2004. Got to retire at a pretty spry 55 the other day. Dividends have been a nice bonus. Drip. Hindsight is 20/20, and I wish I'd bought a lot more. But I'm happy with what I got!