Coming just a bit more than one month after Apple became the first US publicly traded company to be valued at over $1 trillion, Amazon takes second place in the race to corporate hugeness.
Amazon entered the rarefied atmosphere of trillion-dollar companies when its stock rose 1.9 percent last Tuesday to a value of $2,050.50 per share, just 23 cents beyond what it needed to reach that magic trillion dollar point. The price of Amazon’s stock has climbed by 70 percent so far this year, continuing to explode along with other US stocks in the tech sector. The milestone was fleeting however, when the stock actually closed up only 1.3 percent, not enough to keep it beyond $1 trillion.
Amazon has been doing quite well lately, pulling past other tech major players such as Alphabet, Google’s parent company, and Microsoft. Alphabet’s valuation stands at about $840.3 billion, and Microsoft’s at $854.5 billion.
In 1994 Jeff Bezos founded Amazon as an on-line bookseller. The company grew quickly to become one of the US’ most influential companies. Based in Seattle, Amazon is a leader in e-commerce, but also is expanding to other markets such as cloud computing, home security and movie production. Only Walmart hires more people, and this year’s profit so far comes to $4.1 billion. Bezos is also the owner of the Washington Post.
Bezos is the world’s richest person. As a the major beneficiary of the skyrocketing stock price, as of Tuesday, Bezos’ worth is estimated to be $166 billion.
Two high tech giants, Foxconn and Apple, are considering a deal to build a panel factory in the United States at a cost of about $7 billion and could create between 30,000 and 50,000 jobs. Chairman Terry Gou of Foxconn said that an investment by Foxconn’s Sharp division will depend on the terms negotiated for the deal at the state and federal levels.
The announcement of the deal comes close on the heels of President Donald Trump’s inaugural address in which the new president promised to make “America First” as the backbone of his policies leading the nation. Trump stated in his speech: “We will follow two simple rules: buy American and hire American.”
One of Trump’s campaign promises was to try and persuade Apple to bring the manufacture of iPhones to US shores. Trump said that he was optimistic that Tim Cook, CEO of Apple, had his “eyes open” to the possibility. Foxconn is the biggest producer of iPhones.
Gou said that Trump-style protectionism was inevitable, but he is unsure how Americans will feel about spending hundreds of dollars more for a phone that does not work any better than a less expensive model that was made overseas.
Gou vowed to increase his investments in China. Apple is also dependent on China, not just for production, but also for sales. Last year China made up 22 percent of Apple’s total revenue, some $46.4 billion.
The general description of shares on the stock market at the moment can be described as “expensive” according to many observers.
A report in Yahoo Finance stated that “One reason that folks are paying up for richly priced stocks is that money – for many – is not much of an object right now.’’
The report added that American companies have added about $700 billion in debt so far in 2015, and repurchases of stock are on their way to going beyond a value of $600 billion.
Stocks for US companies are high-priced. The median stock carries a higher valuation than almost all of the time in the last 40 years, Yahoo stated. The largest 100 companies in the world today are worth an enormous $16.24 trillion. That amount is close to double what those companies were valued at immediately following the recent financial crisis.
According to PwC, Apple Inc. is the most valuable business in the world, with a market capitalization of $725 billion, which conducted a study in March. Since 2009 the maker of the iPhone and many other popular consumer electronic products has increased its market value by 671%. Only 6 years ago Apple was ranked the world’s 33rd largest company and worth about $94 billion.
The second largest company in the world is Google, with a valuation of $375 billion, more than double its worth in 2009 of $110 billion. Six years ago it ranked in 22nd place.
After what Lego exec Soren Torp Laursen called “supernatural increases” in sales “over the last eight years,”Dutch toy maker Lego can sure use a leg up this year from lagging sales posted in 2013. Lego is hopeful that the popularity of “The Lego Movie” will translate into improved sales figures. So far “The Lego Movie” has been number one at the box office for the past three weeks in a row in the US.
Lego has maintained its popularity over the years, even in the face of fierce competition from seductive digital games, especially mobile apps formatted for Apple iPads. But last year Lego reported a tiny rise in sales in its US consumer market of 1 percent to $1.35 billion. That number represents an almost 8 percent share of the US toy market, marking Lego as the third largest toy manufacturer in America.
In 2012 overall revenue for Lego worldwide equaled about $4 billion. US sales contributes to a large portion of Lego’s overall sales, and in 2012 US sales skyrocketed by 26 percent. The 2013 sales slowdown prompted this commented from Laursen, the head of Lego’s North American business division.
“Our U.S. sales growth last year was more moderate than the supernatural increases we recorded over the last eight years.”
In one more buyout in which Apple keeps the competition down, the mega computer company purchased the company that created the popular photography application SnappyCam. The purchase of SnappyLabs is one more in a series of acquisitions and buyouts by Apple which keeps them current with the latest technology without requiring Apple itself to introduce anything new.
Users can purchase SnappyCam as a $1 app which upgrades their mobile phone’s camera functions. SnappyCam adds several useful functions, but it’s most well-known and popular is allowing a smartphone to take pictures in quick succession by holding down the on-screen shutter-button.
The tech blog TechCrunch first reported the Apple’s most recent purchase, but the amount of the buyout is still unknown. The buyout is further proof that Apple has diverged from the company’s traditional custom of avoiding acquisitions while Steve Jobs was the CEO. It appears that the company buyouts are taking the place of innovation as competition in the app marketplace only increases.
Apple has been teasing the marketplace with a soon-to-be-but-yet-to materialize smartwatch and TV product. The iWatch is due for release in late 2014, buy a Samsung iWatch has already hit the market. The response to the buyout of SnappyLabs was a 22 percent downturn in Apple’s share price, closing at $540.98.
In 2013 Apple purchased 11 companies. In 2011, the last year Jobs ran Apple the company only purchased two tech firms. In 2009 they bought one company, a music service known as Lala.com because it was in completion with Apple’s own platform iTunes. Apple predictably closed down Lala.com and maintained its tight hold on music delivery. In 2010 Apple bought-out four companies.