How much is the fed responsible for Apple becoming a $2trillion company

[GusFring]

Sure apple is popular, but $2trillion, how is that even possible?

[A HERETIC I AM]

1. Because they have enough shares being traded such that the price gives them that valuation.

They have 4.28 Billion shares outstanding and with the price in the $463/share range, it makes their "Market Capitalization" $2 Trillion.


https://finance.yahoo.com/quote/AAPL/key-statistics?p=AAPL

And BTW, the Federal Reserve is buying bonds, not stocks. Granted, it is putting a finger on the scale no doubt, but they aren't buying equity shares in any companies.

[GusFring]

3. So you don't think the fed is doing something to inflate stock shares?

[ProfessorGAC]

4. Sort Of Backwards, Gus

What the fed is doing is preventing equity value drops.
The S&P is above the economic equilibrium range now, (overvalued), but the markets got spooked over COVID, and some companies are suffering.
This buying of bonds is helping enhance cash flow without assumption of short term debt or dilution of equity control.
For a company like Apple, it's doubtful they would have seen a value plunge, so they're a bad example.
For some companies, however, the cash infusion by the fed is protecting against a plunge that shakes investor & consumer confidence.
Apple would very likely be where they are without fed support of the greater markets.

[A HERETIC I AM]

6. Kudos on the answer. I was typing so I didn't see what you had written.

I would have deferred to your statements

[A HERETIC I AM]

5. They are buying debt, which injects cash into the system.

If you hold a bond, you are getting a stream of interest payments and at maturity, you get your principle back. The Fed is buying debt, so if I bought that bond, now you would have cash. What would you do with it? Since there is bugger all for interest rate yield at the moment, you might very well buy stocks.

Is that the Fed directly influencing stock prices? No, I don't think so.

Is it, as I said, a finger on the scale, so to speak? Damn right it is.

I think there are plenty of big players behind the scenes that do not want their taxes to go up, and they will go up if we take the White House and the Senate. So since the only thing Trumpy has to run on is the stock market and the illusion that creates for the economy as a whole, then the Fed and Mnuchin and the rest are going to do everything they can to keep the market from falling again.

[unblock]

2. He's one thought: Apple gets 30% of all apps revenue

Can you imagine pre-smart phones, Microsoft or Apple charging a 30% cut of every application program that ran on their operating system?

I write a computer program that works on windows, and Microsoft gets 30%? Ridiculous, right?

But that's basically how the App Store works. Apple gets 30% of the revenue of any app on their store.

They're leveraging their monopoly power to extract money from other peoples' risks and labors.

A modest fee is not unreasonable, but 30% stinks of monopolistic power.

But the government no longer takes anti-trust laws seriously anymore, even before Donnie.

[Blue_true]

8. Amazon works in a similar way, but for a somewhat lower cut.

Any company that sells on Amazon pays Amazon 15% of the sale price, right off the top. There are some additional small charges that take Amazon’s cut up toward the 20% level.

Why would sellers tolerate a 15-20% haircut? Because if those sellers have a good product, Amazon’s reach and transaction efficiency gives the seller something out of the gate that would take years to develop organically. That is why, if you look at a particular item, it costs more if sold on Amazon, the reason is the seller is recouping some of the trim that Amazon takes, and if the product works, customers don’t care as long as the price seems reasonable for the quality and quantity.

[lame54]

7. What about Amazon...

Our post office made them rich

But not a word from Bezos

[Blue_true]

9. Amazon has historically used UPS far more than the USPS.

In recent years Amazon started using the USPS, that provided the USPS critical parcel delivery revenue. Typically the USPS handles the “last leg” of the delivery, which can be lucrative for the USPS, even when the USPS doesn’t charge much for it.


You are using Trump’s meme that the USPS made Amazon. I am sure that is unintentional on your part, but the meme is flat wrong, the business that the USPS started getting from Amazon a few years ago likely saved the USPS after republicans in Congress put that burdensome pre-funding of retirements for 75 years on it (I really don’t understand why democrats won’t repeal that requirement, but so far, it stays in place).

[lame54]

10. Are you a spokesperson?...

Amazon saved the post office?

Now we're in Bizarro Bizarro world

[Blue_true]

13. No, I am not a spokesperson, I just remember how things were.

Last edited Thu Aug 20, 2020, 12:32 PM - Edit history (1)

The retirement pre-fund fiasco that republicans saddled the USPS with was causing it to run such large deficits that just raising stamp prices could not cover. Amazon entered the picture around 5-7 years ago, adding the USPS to it’s carrier option, that revenue for the USPS was huge and almost surely saved it from that republican mandate for it to fail. Bezos and Amazon have their faults, but their dealings with the USPS is not one of those faults.

Update: this snip from a national article after Trump again lied about Amazon and the USPS.

Trump is right that the Postal Service is losing money, but Amazon and other internet e-commerce companies aren't necessarily to blame for that. Previous analysis conducted by CNBC found Amazon may be saving the post office from financial demise, due to growth in package shipping from online retailers like Amazon. Amazon also relies on a range of carriers to deliver packages, such as UPS and FedEx, and is increasingly building its own network of contracted delivery partners, which now total 1,300 firms.

[A HERETIC I AM]

11. What made them rich was hundreds of millions of people using the service they provide

Sure they use the USPS to deliver the last mile in many cases, but to say "Our post office made them rich" is a bit of a stretch.

You might as well say they are making the Union Pacific and BNSF railroads rich because of this;



And FWIW, a few weeks ago I was crossing the Mojave on I-40 in California and I saw an entire, mile long string of Piggyback rail cars loaded with those Amazon trailers.

They are contracting with Cargo airlines like Atlas and painting airplanes as well;



It is remarkable that 5 of the largest corporations in the world by market cap are younger than the oldest piece of clothing I own, a 1988 Quaker State Racing jacket.

[lame54]

12. And if trains and planes were about to go under...

I'd say
Where the fuck are you Bezos?

He didn't become the richest man in the world by paying full price for anything

Walmart has millions of customers but they are sleazy cheaters

Success does not justify how you got there

[Initech]

16. I seriously wonder how Amazon hasn't started their own airline yet.

It might not be profitable to do so now but when travel ramps back up people are going to want and demand it, and demand will skyrocket. Amazon could even use smaller airports like Long Beach to meet the increased demands. Hell, Prime Air could even use Amazon onboard entertainment services and offer discounts for Prime members. Hey Bezos, call me!

[A HERETIC I AM]

20. Give it time!

Seems to me they are selling just about everything except items that have an engine, meaning cars, boats and planes.

Ebay Motors has the online car bit covered. Among others.

Shit is moving forward. No use in complaining about it. What we can do as consumers and workers is vote with our dollars and our feet.

Shop at your local Ace Hardware, for instance instead of Lowes or Home Depot. Go to your nearest Bed Bath and Beyond as often as needed and possible.

There once was a time when A&P was thought of as this mighty behemoth that would take over the world.

Everything that is large can be made small. The only reason Amazon or Apple or Google has the share price and the welath they have is because people find value in, and use their services, full stop. if tomorrow, everyone stopped buying from Amazon and went back to doing business like they did only 20 years ago, their share price would be at $10 in a week.

[Initech]

14. Also South Park nailed it too:

Amazon employees use Amazon services, so they are almost quite literally giving their money back to Amazon, or in this case, the company store.

[A HERETIC I AM]

18. I haven't watched South Park regularly for a long time....

But yeah...they still nail it now and again.

Thanks.

[Blue_true]

15. People get an image locked in their heads and no amount of facts will dislodge that. nt

[ck4829]

17. Good question

[Awsi Dooger]

19. No idea but it wasn't difficult to forecast

Superiority annihilates details