Apple’s Stock Sets Record Closing High, Market Cap Record Still Waits

| Apple Stock Watch

Shares of Apple Inc. set an all-time closing high on Tuesday, ending the day at $100.53 per share, a gain of $1.37 (+1.38 percent), on heavy volume of 69.4 million shares trading hands. The previous closing record was $100.30 per share, set on September 19th, 2012.

$AAPL Chart for Tuesday, August 19th, 2014

$AAPL Chart for Tuesday, August 19th, 2014
Source Yahoo! Finance (annotation by TMO)

It's a stellar day for $AAPL shareholders, CEO Tim Cook and his newly expanded leadership team, and the company's board of directors, but there are still a couple of records left to set. The first is the intraday high, which is $100.72 per share, hit on September 21st, 2012, just before the stock took a nosedive on concerns about Apple Maps (and what that theoretically said about Apple).

An even bigger record for Apple's stock lies in its market capitalization (market cap), or the total value of a company based on the number of shares outstanding times the share price. While Apple's stock price is safely in record territory, Apple's market cap is still many billions of dollars off its all-time high, and that's not including inflation.

This is because of Apple's (record-setting) share repurchase program, where the company has taken billions of dollars in profits and bought back tens of millions of shares. At the time of Apple's all-time closing high in 2012, the company had some 948 million shares outstanding, or 6.64 billion shares on a split-adjusted basis. That made Apple's incredible market cap approximately 666 billion*.

That was—and is—a record in absolute dollar terms, surpassing Microsoft's 1999 pre-bubble valuation of $613.3 billion. When you throw inflation in, however, Microsoft still holds the record. That $613.3 billion in 1999 dollars is worth between $818 billion and $1 trillion in 2013 dollars.

Back to that share repurchase program: Apple has some 6 billion shares outstanding as of Tuesday, well south of the 6.64 billion it had in 2012. That puts Apple's market cap on Tuesday, August 19th, 2014, at $602 billion, also well south of the $666 billion Apple hit in 2012.

This isn't a bad thing—quite the opposite. Apple bought back all those shares in the first place to lift share price. That Apple hit a closing high on Tuesday is due in part to the fact that it bought back tens of millions of shares. It would not have had a new record otherwise, and we wouldn't be talking about this.

But it does mean that we, as Apple investors and fans of the company's products, have a couple of more records to look forward to. With the number of shares outstanding as of Tuesday, Apple needs to hit roughly $110.98 per share before the old absolute record market cap is surpassed. After that, we can look forward to the seemingly insane possibility of a trillion dollar valuation to knock Big Redmond off its relative perch.

*\m/ \m/ (Also, it was just below that mark, but rounding is as rounding does).

In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

Comments

wab95

Bryan:

You’re sounding a wee bit feisty there, lad.

As for those lofty ambitions, you do realise that Apple is a dead company, do you not?

Personally, I’m feeling the strain of just waiting for the next peevish little analyst to explain to us how Apple’s next product rollout, not yet announced mind you, is already a failure.

RonMacGuy

Bryan,

You do have an error in your numbers.  You said, “That made Apple’s incredible market cap approximately 6.66 billion*” when I think you meant to say 666 billion.  Got a little mixed up with market cap and shares outstanding.

Obviously, with the mark of Satan here, there is no doubt that the only reason that Apple has prospered is that Tim Cook sold Apple’s soul to the Devil.  It is the only way to explain why so many analysts (and cranky TMO trolls) are so wrong all the time.  They were right, of course, and the only reason Apple hasn’t died yet is because of some supernatural help!!  Of course!!

Everyone watch for Cookie’s eyes to go demonic black on Sep 9!!

“I have exorcised the demons!!  This house is pure.”

samanff

Good company, excellent product line….I just don’t get it where the Apple haters come from….I’m not an Apple nut, but the my customer experience has always been good.

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nails

RonMacGuy

Excellent question, samanff, for which we will never truly know the answer!!

mrmwebmax

+

@samanff, as someone who has used Macs since 1988, and worked in and around IT departments since long before then, I think a lot of the roots of Apple hatred come from heavy-duty IT types. Back in the day before the Mac, there was a feeling in computer programming that if it was hard to program, it should be hard to use. There was also a certain mystique associated with being a hard-core hacker who could make a computer do things no mere (non-programmer) mortal could do. The Mac changed that, and in a way it stripped the hard-core geeks from much of their powers by delivering it to the everyday person. Hence cries of “the Mac is just a toy,” because obviously something so easy to use couldn’t possibly be a serious machine. In a previous job, I once sat across from an IT intern, still in college, who has a picture of a Bondi-blue iMac in his cube with a captain that read: “If you make a computer that an idiot can use, only idiots will use it.” That was a typical attitude throughout the late Eighties and Nineties and into the early 2000s.

When Apple’s resurgence began and the iPod was released, and when iTunes came to Windows, suddenly Apple was cool and everyone was sporting white earbuds. The level of iHate somewhat abated…until the iPhone came along. The iPhone itself didn’t trigger Apple haters initially. Rather, Google’s Android came along, was “open” as opposed to Apple’s “walled garden” approach, and suddenly we had a brand-new Mac vs. Windows paradigm where hard-core Android users proudly talked of rooting their phones and side-loading software while we iSheep blindly locked ourselves into Apple’s walled garden approach.

Then there are those who say Apple’s products are overpriced (they once were, but not anymore for the quality you get), that Apple is all about hype and marketing (they have great marketing, true, but they’re marketing great products), and that Apple user are blind Kool-Aid drinking iSheep cultists (Apple has brand loyalty that other companies can only dream of). Apple is different, they are unlike any company in tech, and they make tech accessible to all, not just those who boast of installing Linux on their toasters.  And that is the root of all the iHate out there, IMHO. smile

Bryan Chaffin

Thanks for catching that, Ron. It’s fixed.

wab95

@mrmwebmax:

Very nice summary.

Bryan:

I figured you’d fix that decimal, after a good night’s sleep. I do find it curious that the first Apple machines, if memory serves, were priced in the USA at $666 and that Apple’s crowning market cap was $666B. Fascinating, if correct.

mrmwebmax

+

wab95,

Thanks for the compliment. As for the original price of the Apple I, you are right: It was $666, or, to be exact, $666.66 because Woz liked repeating digits and because it was a one-third markup on the wholesale price of $500:

en.wikipedia.org/wiki/Apple_I

That price of $666.66 was quite a bargain, considering it gave you a blazing-fast 1 MHz CPU and a massive 4K of memory. (Scary when just a little more money today can buy you an unlocked iPhone 5s, which has slightly better specs.)

RonMacGuy

Further proof of satanic involvement with Apple!!  And nice write-up, wab95.

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