“Boosted by upbeat investor reaction to its strong earnings report this week, Apple Inc. has become the second-largest company on the S&P 500 Index in terms of market capitalization, surpassing Microsoft Corp, the publisher of the index said Thursday,” Rex Crum reports for MarketWatch.
“According to Standard & Poor’s index services unit, Apple reached a market cap of $241.5 billion to pass that of Microsoft’s $239.5 billion market capitalization,” Crum reports. “Now Apple trails only Exxon Mobil and its market cap of more than $300 billion, S&P said.”
“The S&P 500, like many other Standard & Poor’s indexes, is float-adjusted. To calculate the index’s components by market capitalization, S&P excludes shares not available to public investors – those closely held by “control groups,” other companies and government agencies,” Crum reports. “Some 87.7% of Microsoft shares are publicly floated, vs. 99.2% for Apple shares, according to FactSet Research. Using all shares outstanding, Microsoft’s market capitalization is still larger than Apple’s, S&P acknowledges.”
“Microsoft took umbrage of its demoted ranking. The company said that using all 8.764 billion shares outstanding, which it valued at $30 a share, would put the company’s market cap $262 billion,” Crum reports. “‘Just because Bill Gates and Steve Ballmer don’t trade their shares doesn’t mean that the market cap doesn’t include them,’ said Bill Koefoed, general manager for Microsoft investor relations, in emailed comments.”
MacDailyNews Take: You’d think the general manager for Microsoft investor relations would have his hands full 24/7 explaining why his company’s share price graph looks like a parking lot and trying to persuade them not to dump their shares to buy Apple instead:
Crum reports, “But Standard & Poor’s stuck by its ranking. ‘Apple is bigger on a float basis, which is what the index is,’ said S&P senior index analyst Howard Silverblatt in an emailed response to MarketWatch. ‘I also state that on a full basis, MSFT is still larger,’ he said.”
Full article here.
MacDailyNews Take: Microsoft would have done better to keep their mouths shut as this whining will only serve to intensify the reactions when the inevitable arrives.
As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft. – MacDailyNews Take, January 10, 2005