Apple’s 3 trillion – Here’s what it means

On Monday 01/03/2022, Apple became the first publicly-traded company to briefly reach a market capitalization (value) of $3 Trillion:

Source: Wall Street Journal

Now, you might wonder what that means, and why should I care?

Here’s a quick lesson:

The term Market Cap, short for “Market Capitalization,” refers to the size of a publicly-traded company. 

The formula boils down to the stock’s current share price multiplied by the number of shares available to the public. 

Market cap = Price of the Stock X Number of shares outstanding

Based on that formula, we can conclude that when a company’s stock price increases, so do its market cap or “size.” 

Another way to think of Market Cap is how much it would cost someone to buy the entire company.

For instance, if you wanted to buy Apple (the entire business – including all assets, cash, debt, etc.) – the company would need to be on sale (first of all).

Then, you’ll need to write a nice little check for $3 Trillion!

And here’s a cool image, courtesy of the New York Times and FactSet, which shows how quickly Apple has been reaching each milestone thus far:

Quick update (1/4/22): After soaring briefly to a new high, Apple stock price has pulled back a bit since yesterday’s euphoric times. The market cap is back down to ~2.94 Trillion. 

However, based on what I’ve seen over the last several years of studying the stock, I don’t doubt it will rise back to the record high and proceed its way up from there.

And that’s all, folks! Question? Comments? Share below 🙂

Cheers to Health & Profits,

Mabel

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