Tag Archives | stock market

Apple Overtakes Microsoft in Market Value

In a sign of Apple’s continuing ascension to the top of the technology heap, at 2:30pm ET today the company became the most valuable technology company in the world with a market capitalization of $227.1 billion. This was slightly morethan Microsoft’s $226.3 billion.

Both shares took a significant tumble late in the afternoon as the market gave up its gains and then some in the final hour of trading. Even so, Apple still finished in front at $222.1 billion, far ahead of Redmond at $219.2 billion.

How important is this? On the entire New York Stock Exchange there is only one American company that is more value, and that is oil giant Exxon Mobil. It also completes what could really be called a stunning comeback for Apple, which as recently as teh years ago had been in bad financial shape.

One ironic point: Microsoft itself could be credited with helping bring back Apple from the dead: in 1997, the company made a $150 million investment in the company shortly after Steve Jobs returned for his second and current stint as CEO.

Investors in Microsoft cannot be happy with what they’re seeing here. Since 2005, Microsoft’s stock has been essentially flat, posting a meager four percent increase. Compare this with Apple, whose stock has risen a staggering 550 percent in that same time period.

That to me is just crazy.

(Disclosure: Ed Oswald has small holdings of stock in both Microsoft and Apple, Inc.)


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Microsoft’s Next Acquisition Target May Be RIM

Research In Motion’s stock price has taken a nosedive in recent weeks. While some of it has to do with the overall market meltdown that is occuring on Wall Street, it is also experiencing pressure related to the costs of launching new devices such as the BlackBerry Storm and Bold, which Harry just spoke of.

The stock is now down to about $53, a stunning 65 percent fall from its June high of $148. It’s precipitous drop has stirred talk on the Street of a possible buyout, with one analyst saying Microsoft could be that company.

“RIM is a massive strategic fit” for Microsoft, Canaccord Adams analyst Peter Misek told Reuters. “I’m fairly certain they have a standing offer to buy them at $50 (a share).”

If Microsoft were able to make this happen, it would be a huge win for them. Windows Mobile (while doing okay) really hasn’t made much of a real dent in the smart phone market. By snagging RIM, Redmond would gain a good deal of footing against Apple and Symbian, as well as new entrant Google.

There is some thing that still need to happen, namely at least another $10 or so drop in RIM’s stock price if this were to happen. RIM right now has a value of about $31 billion or so, a little to much for Microsoft to handle without tapping the credit markets.

With credit all but frozen right now, that’s not going to happen. However, if it is able to make a $50 per share offer, the value of the company would be placed at about $28 billion, much more affordable.

Reuters estimates that Microsoft has about $24 billion or so in cash and short-term investments that could be used to finance most of the deal. I guess the question then becomes, is it worth it depleting your cash reserves in an economic climate such as this?

I’d think you’d be able to find a lot of analysts who would argue that wouldn’t be such a smart idea.


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Tech Stocks Aren’t Immune To The Market Meltdown

There was a time when the market first became wobbly last year that market watchers commented on how well the technology sector was holding up: that time has come and gone. With Wall Street in a tailspin, tech stocks are no longer enjoying the immunity to the market’s problems. From Redmond to Cupertino, and Sunnyvale to Armonk, the pain is beginning to spread.

In fact, some are seeing years of progress wiped out as investors head for the hills. Among the top five tech stocks (in terms of market capitalization), all are down significantly, with most trading quite close to 52-week lows and in some cases multi-year lows.

Microsoft, the largest technology company, has seen its stock fall nearly 21 percent year-over-year as of Tuesday. This is especially frustrating for the company’s shareholders considering the stock saw an impressive run towards the end of 2007 where the stock peaked at $37.50 a share in early November. Since then, the stock has taken a precipitous decline, losing a third of its value and falling back to the levels it has been stuck near for much of the decade.

#2 IBM is also down 18.5 percent, and so is #5 Hewlett Packard, which has fallen nearly 23 percent during the pas year. The biggest drops among the tech heavyweights are Cisco and Google, both falling by more than a third.

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