Apple HAS NOT made it to a trillion! Whoops

[Jtalk4456]

https://www.independent.co.uk/life-style/gadgets-and-tech/news/apple-stock-price-share-trillion-dollar-latest-update-a8474726.html

TL:DR a stupid mistake caused the apple stocks app to show an incorrect value, placing apple above a trillion when they're not quite there yet

Quote

 

The firm has been hovering around the $1 trillion mark for some time, and breaking through would represent a major milestone. But the company falsely claimed to have already broken through it, because of a technical fault with the app built into the iPhone.

After it announced its better-than-expected results this week, Apple also bought back some of its shares. That meant that the stock price needed to push through the record went up – from around $204 to $207.

 

So basically, them taking back some stock means they had to push a bit further to get to a trillion. I don't understand stocks and economics but whatever...

Quote

 

But that update wasn't added to Apple's own Stocks app. That meant that a small surge in Apple's shares showed the company as being worth $1 trillion – even though it isn't.

It led to reports, including briefly on The Independent, that suggested Apple had finally beaten the milestone.

The share price data on the iPhone is provided by Yahoo Finance and pulls through not only on the app – which comes bundled with the phone – but also into Siri. That means that if you ask Siri for the current value of Apple's whole stock, it will tell you the wrong answer: $1.011 trillion at the time of publication.

 

*Facepalms*

So essentially they didn't update their own app. A tech GIANT (like them or not) didn't update their own app and caused everyone to think they were valued higher than they are. This should surprise me more, but stupidity seems to be rampant in this day and age. 

Quote

 

The problem happened because Apple's substantial share buyback programme – which allows it to give money back to investors – meant that some of its shares were destroyed. That took them out of circulation and meant that the total number of shares in issue went down, increasing the value the share price had to reach before it pushed the company over $1 trillion.

A company's market capitalisation or value is worked out by multiplying its share price by the number of shares that are in issue. Since there are now fewer shares, the price required to make Apple worth a trillion dollars is higher.

Apple's shares are worth $205.18, after a rise of $3.73 on Thursday morning, according to the company's own Stocks app. They need to reach $207.05 before they push through the all-important valuation.

 

I'm sure they'll hit it, but this whole incident will set them back temporarily. not much else to say here

Edit: Added another news article. Most big sites haven't found out or made a article yet

https://appleinsider.com/articles/18/08/02/apples-market-capitalization-is-not-1-trillion----yet

[Froody129]

Lmao. By tomorrow this will be outdated anyway as they hit it again  

[Lurick]

Just now, Froody129 said:

Lmao. By tomorrow this will be outdated anyway as they hit it again  

And then we'll make another thread about that!

[DimasRMDO]

Previous thread -> Apple has done it, they're worth $1T!

Now -> Apple hasn't made it to $1T

Later -> Apple's made it to $1T! This time's legit!

[flibberdipper]

2 minutes ago, Lurick said:

And then we'll make another thread about that!

Seems like a great time to reputation whore be alive!

[DrMacintosh]

Hitting 1 trillion is unavoidable, but interesting to see what caused it, lol. 

[dtaflorida]

Whew! What a relief, I thought I missed the bus. Gotta get over to gofundme and start a campaign quick!

 

Help make Apple the youngest trillionaire ever! All funds to to buying Apple stocks which directly puts your money into this amazing goal of making Apple a trillionaire! Be a part of this historic event now!

[Vanderburg]

22 minutes ago, Jtalk4456 said:

So basically, them taking back some stock means they had to push a bit further to get to a trillion. I don't understand stocks and economics but whatever...

Because they bought some stock back, less of it was available. For example, say there are 100 shares, worth $100 each. That puts the value at $10,000. If they buy back 10 of those shares, then there are 90 shares available, worth $100 each, for $9,000. This means the 90 shares would have to get to $111.11 (repeating, of course) to reach $10,000 again.

[Tech Enthusiast]

Honestly, this is why people are upset they are worth so much.

 

They are "worth" a trillion, but can't even manage to make a stock app work right. Actually, an epic fail and should be a meme. ;-)

[Drak3]

1 hour ago, DimasRMDO said:

Previous thread -> Apple has done it, they're worth $1T!

Now -> Apple hasn't made it to $1T

Later -> Apple's made it to $1T! This time's legit!

Even later - Apple hasn't made it to $1T, actually went down slightly.

[Jtalk4456]

51 minutes ago, Vanderburg said:

Because they bought some stock back, less of it was available. For example, say there are 100 shares, worth $100 each. That puts the value at $10,000. If they buy back 10 of those shares, then there are 90 shares available, worth $100 each, for $9,000. This means the 90 shares would have to get to $111.11 (repeating, of course) to reach $10,000 again.

thanks for the info. What i still don't get is why they bought stock back and effectively devalued themselves, especially given all the news of how close they are

[Lurick]

Looking at the closing numbers they seem to be at 1 trillion now.

*makes another topic*

[Sakkura]

32 minutes ago, Jtalk4456 said:

thanks for the info. What i still don't get is why they bought stock back and effectively devalued themselves, especially given all the news of how close they are

A stock buyback doesn't devalue the company. There are fewer shares but a higher price per share, with the overall market cap remaining about the same.

 

It does reduce the company's equity, which can be beneficial if it has a lot of cash on hand and is in a dominant market position; it reduces the cost of equity. Basically the company is paying to have its cash, and if a lot of it is sitting unused they're better off using some of it to buy back shares.

[Jtalk4456]

4 minutes ago, Sakkura said:

A stock buyback doesn't devalue the company. There are fewer shares but a higher price per share, with the overall market cap remaining about the same.

 

It does reduce the company's equity, which can be beneficial if it has a lot of cash on hand and is in a dominant market position; it reduces the cost of equity. Basically the company is paying to have its cash, and if a lot of it is sitting unused they're better off using some of it to buy back shares.

but the whole point of this topic is that the buyback lowered their market value, which is why they really aren't at 1 trillion. Are you saying that's wrong and they ARE above 1 trillion?

[Sakkura]

1 minute ago, Jtalk4456 said:

but the whole point of this topic is that the buyback lowered their market value, which is why they really aren't at 1 trillion. Are you saying that's wrong and they ARE above 1 trillion?

The buyback did not lower their market value.

 

The app mistakenly thought the buyback increased their market value.

[Jtalk4456]

Just now, Sakkura said:

The buyback did not lower their market value.

 

The app mistakenly thought the buyback increased their market value.

This is why I'm not a stock broker. That makes no sense to me, but thanks for trying to explain it

[Guest]

2 hours ago, DimasRMDO said:

Previous thread -> Apple has done it, they're worth $1T!

Now -> Apple hasn't made it to $1T

Later -> Apple's made it to $1T! This time's legit!

Actually the past thread was Apple nearly hitting a trillion. Nothing to say it did.

[Sakkura]

4 minutes ago, Jtalk4456 said:

This is why I'm not a stock broker. That makes no sense to me, but thanks for trying to explain it

Imagine a company that has 10 outstanding shares worth $10 each. That company has a market value of $100.

 

Then the company uses $10 of its money to buy back one share. The share price increases to $11.11 with 9 shares outstanding, with the market value remaining at $100.

 

But if an app is looking at the share price and doesn't know the number of shares dropped from 10 to 9, it would think the market value just increased from $100 to $111.11.

[Jtalk4456]

3 minutes ago, Sakkura said:

Imagine a company that has 10 outstanding shares worth $10 each. That company has a market value of $100.

 

Then the company uses $10 of its money to buy back one share. The share price increases to $11.11 with 9 shares outstanding, with the market value remaining at $100.

 

But if an app is looking at the share price and doesn't know the number of shares dropped from 10 to 9, it would think the market value just increased from $100 to $111.11.

ok i see the math you're using, not sure i understand why the price per share increases just from the company buying back a share, though

[Sakkura]

1 minute ago, Jtalk4456 said:

ok i see the math you're using, not sure i understand why the price per share increases just from the company buying back a share, though

You can look at that a few different ways. Supply and demand, for example. If you reduce the supply (fewer shares available), the price goes up.

 

Or you can look at it as each share owning some (tiny) percentage of the company and receiving the same percentage of the money when the company pays dividends. When there are fewer shares, each shareholder will own a larger percentage of the company and get a larger percentage of the dividends, making the share more valuable.

[Jtalk4456]

6 minutes ago, Sakkura said:

You can look at that a few different ways. Supply and demand, for example. If you reduce the supply (fewer shares available), the price goes up.

 

Or you can look at it as each share owning some (tiny) percentage of the company and receiving the same percentage of the money when the company pays dividends. When there are fewer shares, each shareholder will own a larger percentage of the company and get a larger percentage of the dividends, making the share more valuable.

ok that makes sense. Thanks for the help!

[Master Disaster]

I'm beginning to question the legitimacy of this news...

 

So far nobody else has reported this to be true, all the major news outlets still have live stories about Apple being worth $1T and many news outlets have since ran follow up stories on how Apple have achieved the feat. Heck even Apples own news post is still live.

 

Beginning to think this is a fake news story picked up by a major outlet and ran in error.

[Syntaxvgm]

Is this gonna be like the Jenner woman where people will set up a gofundme page to get them to a trillion? 

[Peskanova]

 

18 hours ago, Jtalk4456 said:

But the company falsely claimed to have already broken through it, because of a technical fault with the app built into the iPhone.

So apple hit 1 Trillion was a mistake of the Iphone? This sums apple.

[goodtofufriday]

Everywhere I look it seems like apple has indeed reached 1trillion. They needed to close at 207.39 to be worth that.

@Jtalk4456