Russian “Gazprom” more than 7 times inferior to Apple by market capitalization, however, far exceeds the manufacturer of smartphones in real value. “Mystery? The paradox? Not at all,” – say the experts Politrussia.
How much is the Apple
The stock market exploded in another drama: collapsed stocks known electronics manufacturer Apple a year ago who led the top most expensive companies in the world.
In the autumn of 2014 the price component of Apple shares exceeded $ 661 billion dollars and almost a third exceeded the aggregate value of shares of Russian companies, then traded on the Moscow exchange.
Many journalists responded immediately to the scandalous headlines: “Apple is worth more than Russia”, and some media even tried to develop the idea and noted that in comparison with the great brainchild of Steve jobs all there Gazproma (capitalization of $ 90 billion) and Rosneft (75 billion dollars) are frivolous fuss in the sandbox.
The absurdity of this approach captures the essence of pricing stock market. And it can be traced to the fact that at the moment happens to Apple stock.
Who on the market is selling and who is buying
Recently, Apple published data reflect the next state of Affairs in the company:
More than positive dynamics of indicators of the company should contribute to the attractiveness of the Apple Inc. However, the market responded with a reduction in price of securities of the company by 7%. Apple’s market capitalization fell by 66 billion.
(Market capitalization is the value of the company calculated on the basis of the total value of all its shares issued in the conversion. Formula market capitalization: number of shares outstanding * share price = market capitalisation. So, if the company has 100,000 shares worth $10 each, the company’s market capitalization is $1 000 000).
From the standpoint of formal logic, nothing terrible has happened. Look at what precedes the formation mechanism of the market capitalization of the company on the example of small business.
Suppose you ran a business project. You develop and improve – and it requires money, often borrowed. Each time you transition to a higher stage you need additional resources, and may be obtained only from the side. Step by step, you raise finally your business to the corporate level. And here the balance is changing dramatically.
For the same level of production capacity you will need a sales Department, financial Department, etc. But to attract a larger amount than the pledge under the real factory walls, but not anymore.
The problem can be solved quite simply: bail may use a portion of the securities of your company. And for this purpose it is only necessary to convert to a stock company. The next task is to determine how your shares may be worth and how much in General it’s worth. Financial guru and came up with magic the IPO mechanism.
IPO – magic characters
Transforming business at JSC, you define and implement the initial placement of securities on the stock exchange (Initial Public Offering — IPO). The shares of your company for the first time go on public sale.
It is almost always present holders free money, want to build them into something promising and profitable. You have to convince them that your business is the coolest, biggest, stable and with incredible opportunities in the future. Advertising is successful, and everyone lined up for your shares.
Arithmetic market simple: let’s say you managed to sell 1% stake for $ 100 million. At a price of 1% of your company in 100 million dollars, the value of the entire company is $ 10 billion. You have the opportunity to place a portion of the remaining shares in the form of collateral for lending. Profitable, isn’t it? The cost of paper, laid under the collateral when the loan is determined by positive statements and proper submission of your PR Department.
What is absurd is more profitable realities
“What’s wrong with that? – you ask – let them play on trumped up rules, fight with each other, get rich or go bankrupt – what do we get?”
Unfortunately, not all so is simple. In the Western model of economy, in which we are still trying to join, despite the sanctions and the conflict with the United States, was such that the exchange statistics is the measure of all things. Even if it is contrary to common sense.
What will happen to the world if tomorrow morning will not be Apple?
Of course, some have invested in it investment funds and other speculators go bankrupt. But in General nothing bad will happen. Market share will be occupied by competitors, so a world without smartphones will not stay.
What would happen if suddenly disappear the Russian “cheap” Gazprom? No gas will be almost one in three Europeans. The share of Russian gas consumption in the EU has already reached 30% and continues to increase steadily. Whether the shortage to block somebody else? Can, no doubt.
The estimated price of 600 dollars per thousand cubic meters voiced by the expert community. This is the current Gazprom at $ 350, which is in Europe and so some called high. The inevitability of a General decline in the competitiveness of European products by 15-20% obvious. And a considerable part of the European manufacturers have a chance to survive.
Arithmetic unforgiving market: Gazprom 7 times inferior to Apple’s capitalization, but goes far beyond its real value. The paradox? Mysticism? Not at all. It’s just a very convenient situation for those who have learned not only to earn on the stock exchange, but also to manipulate it for their own purposes. For example, to destroy unwanted competitor.