Jinx! Apple loses most valuable company crown to Exxon

Jinx! Apple loses most valuable company crown to Exxon

Summary: Apple can thank Piper Jaffray analyst Gene Munster for jinxing the company's market cap when pondered a $1 trillion valuation.

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TOPICS: Apple
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Apple has been passed by Exxon Mobile as the world's most valuable company in terms of market capitalization.

Following Apple's earnings this week, shares have dropped sharply. That drop allowed Exxon to take the market capitalization crown.

The news isn't that surprising. Not that Apple is bad or anything---its profits are simply amazing. It's just that when analysts are tripping over themselves to give Apple a $1,000 stock target and a $1 trillion market cap it's time to bail.

aapl012513
Apple shares complete a one-year round trip.

 

As noted previously, Apple's market cap jinx was set last year when Piper Jaffray analyst Gene Munster gave the company a $1,000 price target. I said then:

Somehow it's unlikely that Apple CEO Tim Cook is sending Munster any thank you notes. After all, we've seen these wild market calls before. Dow Jones Industrial Average at 25,000? Sure why not? All those dot-com stocks justified to the stratosphere in 2000. Magazine covers proclaiming bear and bull markets. You know the drill. One huge call can signal the end.

Told ya. I'm no investing guru, but have been around long enough to see this Wall Street movie before. History rhymes.

Apple's decline will affect most people since it's in most indexes and mutual fund portfolios. In other words, you may own Apple and not even know it. Simply put, there were no investors left to hop on the Apple bandwagon. That reality may change given you could argue Apple is a bargain at some point.

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Topic: Apple

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28 comments
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  • A history lesson

    Gamblers will always loose money, Apple has no enterprise products which will bring money quarter after quarter. Apple stocks were anyway overvalued. If Apple can't bring any ground breaking products ( Apple TV?), I could foresee Apple stocks reaching $150.

    Nobody wants to pay the rip-off prices for Apple products, the competitors products looks better and have more functionality.
    Owlll1net
    • Google's stocks are overvalued TWICE more than Apple's

      If you will calculate investment returns level into Google's and Apple's share basing on Q4, you will see that the rate is about 4.5% for Google and 9% for Apple, when translated from quarterly to yearly basis.

      This means that Apple can cost twice pricier than now -- 2 * $450 billion = $900 billion -- and still not being the biggest babble in terms of overprices share, but only matching Google's faire.

      Conversely, Google's shares should be twice cheaper to be not overprices comparing to Apple.

      Apple has shown about the same as Google YoY revenue growth (27% on weekly basis, since quarters were of different lengths) and the same slow net profits raise.

      Yet Google's share are not going down, because investors think that Google will somehow find ways grow faster than they did in 2012Q4 versus 2011Q4. They do not believe that Apple will grow.
      DDERSSS
      • About google..

        I am not a Google fan, but they have put their eggs in many baskets. Google got lucky break with Android and YouTube, but they are struggling in Enterprise and all the revenue comes from adverts. If any company that could destroy Google is Microsoft, for that to happen Bing need more international presence and more market share. Bing ad revenue will grow exponentially in coming years putting lot of pressure on Google's business model. If MS can launch a YouTube competitor ( MS has the infrastructure, Azure can scale really big), Google will be in trouble.
        Owlll1net
        • MS can destroy Google

          Seriously, can they?

          Their business models are wildly different. I would bet that neither Google understands Microsoft's, nor Microsoft understands Google's. it is not even possible for both companies to annihilate, for the good of all humanity, because they simply do not have common fighting ground large enough to matter.

          Microsoft is good in cloud technologies? Seriously? A company that just recently discovered this thing exists... They are probably as good there as they are good with anything Internet - that is, mediocre at best.
          danbi
          • is azure cloud?

            If it is then. do yourself a favor and research it - you may learn something
            Master Wayne
      • What I think is funny is how much this bothers you

        It truly is hilarious.

        Hey DDERSSS, if you want to be even MORE furious, Netflix stock skyrocketed 50% after announcing a tiny profit.

        "They do not believe that Apple will grow."

        As is their right. They can spend their money the way they want to. But so can you. If you truly believe that none of this is fair and that apple should be at $900, buy aapl at $900. If you believe that Google should be worth less, offer to buy Google shares at less. If you can find ANYONE who owns Google shares and also believes they should be worth less, you 2 can trade and you'll both be happy.

        What is truly ironic is that you get FURIOUS whenever anyone suggests that apple should lower the prices on their products. You are ADAMENT that apple be able to sell their products at whatever price they want to and that consumers should be able to choose to purchase (or not purchase) apple products at the price that apple sets.

        Stocks work the same way. When you buy a stock, you own that stock and YOU get the set the price of that stock at WHATEVER price you want (this sounding familiar?). Other investors are then free to purchase (or not purchase) your stock at the price that you set (this sounding familiar?). So for you to be whining about how apple's stock price is "wrong" or that Google's stock price is "wrong" is akin to someone whining about how the ipad costs the "wrong" amount.

        aapl is at the right price. Google is at the right price. You want to know how I know? Because people are selling it at precisely the amount that other people are willing to buy it at. No more. No less.

        Too funny. Defend the hive.
        toddbottom3
        • No one seen my "FURIOUS", you can calm down about it

          Also, I do not believe that Google/Apple should cost more or less than they currently do. I never expressed my opinion about that, including in the comment above. (Nor I even care that much, I do not own and do not plan to own shares.)

          However, it is always interesting how companies compare, how differently they are treated by the waves of that are rules by either "bulls" or "bears".

          For example, there was no sane practical reason why Apple's shares continued to grow rapidly after calendar Q2 of 2012, when everybody could see that Apple is going to stagnate until calendar Q4. The notion that Apple was supposed to show like 80% YoY growth from $46 billion to $82 billion sales for calendar Q4 -- was obvious nonsense, so the raise of the cost share because of supposed incredible growth is not believable at all.

          This was just the wave that investors wanted to play, pretending they do not know what they know and that they do not understand what they understand.

          And then the back-wave has started.
          DDERSSS
        • Nice Todd

          Some class in microeconomics for the fanboys
          Master Wayne
    • You're right about one thing in your post.

      Stock market = gambling.
      It's all about Wall street analysts, scratching the surface with their analyses and then speculating.
      Example RIM hasn't sold one single BB10 device yet, but its stock is on the way up based just on the fact that something new is coming soon.

      I however doubt that Apple stocks will reach $150 any time soon.

      As for your last sentence, it's the same old arguments about ripoff prices and competitors's better products, being spewed on the internet the last few years. Nobody wants to pay that, yet it's propelled Apple to top technology company status.
      MG537-23482538203179240121698430309828
      • Absolutely right

        "Stock market = gambling."

        And the reaction of the apple fans (like DRESSS and Gruber and Siegler) is just hilarious. It would be like a sports fan of, say, the Lakers standing in front of a bookie and yelling at anyone betting against the Lakers.

        "You are CRAZY. The Lakers are the best team ever. You should be putting all your money on the Lakers. I don't care if the spread is 300 points. The Lakers can win by 300 points. The Lakers are the best team in sports history. Always bet on the Lakers. What? You like the Lakers and you are betting against them beating the 300 point spread? That's CRAZY. If you like the Lakers, you must ALWAYS bet on the Lakers. Only people who HATE the Lakers would ever bet against the Lakers. You are all crazy, irrational people. I hate you I hate you I hate you."

        Seriously, that's what you guys sound like.
        toddbottom3
        • still amazed

          Why you American boys gamble so much? Sports, fights, stocks, other nonsense...it is always funny to watch. And watching the fate of those poor souls who gamble is even more entertaining that the (dumb) games.

          Remember, life is short. There are so many better things you can do with your lives, than argue whose fan club is "better". Childish.
          danbi
          • as opposed to what? british?

            I can take your comment seriously
            Master Wayne
    • please enlighten us

      How does stock market speculation relate to what kind of products Apple have?

      Apple add doing just fine. Their profit is even higher. The company performance is absolutely irrelevant to its share price. Especially in Apple's case.

      Most likely, Apple will buy back plenty of shares. This is cheaper, than paying dividends sometimes. Then, they may pay higher dividends to smaller number of shareholders. Or do anything else as they please.

      Fora company with huge pile of cash, the value of their shares is irrelevant. The companies that care for higher share price are those who intend to sell themselves.
      danbi
      • it is totally disengeneous to think apple dont care about

        Its share price.

        But maybe u know more. If u dont work for apple already u should apply. You can tell them everything about your buyback theory
        Master Wayne
  • I am not an Apple fan, but....

    The stock is not going to $150.... That would be about the value of the company if you just counted the cash they have on the books. If the panic dropped the stock to $300, I would definitely be buying some. I doubt it will drop below $400 though. Just don’t expect to see $700 again any time soon.
    toph36
  • I wonder if we'll see the appropriate reaction on the way down?

    When apple surpassed Exxon, the cheers from the apple fanboys were heard loud and clear. This was proof that apple was the best. No one was better.

    So, will those same apple fanboys now admit that this is proof apple isn't the best? Will they admit that Exxon is better?

    PS To answer the question in my subject line: I don't wonder at all. I KNOW we won't.
    toddbottom3
    • Todd’s away message

      I am out Fishing………. ;)

      It would be nice to get a roll of toilet paper for every “now admit” in comments from Todd. I then can laugh every time I flash.

      /s
      daikon
      • If I was fishing

        then I'd have to throw you back. I only keep the big fish. Sorry.

        "I then can laugh every time I flash."

        No need to scare the children playing in the park. Besides, I think that would be illegal.
        toddbottom3
  • In actuality, it's probably a good idea to start

    moving your investments away from stocks and into other, more stable "money storage" items. The Fed has been artificially pumping the market for years, now, and more is coming. When the market crashes, it's going to make the housing bubble look like a walk in the park.
    baggins_z
    • Of all the players in the tech industry Apple

      is probably the one that causes the least amount of worry in terms of stability. Their biggest problem is keeping up with demand. Not a bad problem to have. Apple just needs to keep doing what they are doing and keep refining and improving.
      CowLauncher