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Forums - Microsoft Discussion - MIcrosoft is now a 2 trillion dollar company happened june 22(I'm late)

They should buy Sony, Nintendo, Ubisoft, EA, and Activision.



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Sega, Capcom, and Square too.  



Also CDPR and Bungie.



2 trillion? Hmm... They sold me the Series X at a loss... I could have been at MORE OF A LOSS, they can afford it


I want a 24 TFLOP Xbox now Phil. so much for pro consumer.

I feel so ripped off rn...



Monopoly money..... (ei. real value cant have grown that much)
Why is MS worth 6 times as much now, as from back in 2014?

Are they earning 6 times as much?
Same with apple, alot of these companys with high stock values.... I think its a bubble.



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padib said:
JRPGfan said:

Monopoly money..... (ei. real value cant have grown that much)
Why is MS worth 6 times as much now, as from back in 2014?

Are they earning 6 times as much?
Same with apple, alot of these companys with high stock values.... I think its a bubble.

Their value, as perceived by investors, is 6 times higher. You're talking about their intrinsic value while OP is listing their market value.

https://www.investopedia.com/ask/answers/011215/what-difference-between-intrinsic-value-and-current-market-value.asp

MS is not worth 6 times as much intrinstically, but its market value has skyrocketted under Satya Nadella, while under Ballmer it went down. This means that investors are happy with his decisions, which is only great for the company. Will this appreciation go down like a bubble (you mentioned). The answer is easy:

- If the direction stays great, it will not collapse and may grow.

- If the direction takes enough wrong turns, it will collapse or dip of course, relative to the bad decisions taken.

Idk, maybe this helped.

Thats my point.... "perceived value" is mostly just like a magic trick.
Its not real. However because enough people believe in a lie or illusion, it just keeps going.

Its like how theres more people that own gold, than there is gold in the world.
If everyone that has a claim on gold, took it back, there would be people left with their claim, on it, that couldnt get it.
And somehow the stock in gold is fine.

Its a deck of cards, build on lies (imo).
It has nothing to do with real value, or real numbers.
The fact that something can go up in price, simply because enough people by into it, is crazy.

edit:

2015  MS Annual Revenue $93,580 million USD.
2020  MS Annual Revenue $143,015 million USD.

now this is revenue and not profit.
Also inflation between 2015 and 2021 is like ~14%.


So growth is like 33% in revenue (no idea on profits).
While the company became 6 times as much worth in stocks?

Its crazy to me.
Stuff like this is what leads to bubbles in stockmarkets.
Sooner or later, enough people realise there is a issue, and things crash.
We gotta be close to a crash point, cuz that seems insane to me.

Last edited by JRPGfan - on 01 July 2021

Untill its abouts sony marketvalue and its gospel yes yes i have heard it all before



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kirby007 said:

Untill its abouts sony marketvalue and its gospel yes yes i have heard it all before

Sony are probably overvalued too.

MS annual earnings = $143 billion rev, $53 billion in operating income)  = stock value $2T  (2000 B)

Sony annual earnings = $82.5 billion rev,  $10,7 billion in operating income)  = stock value $121,2 B USD


So MS stock is worth like 16 times more than Sony, but they only make about 2 times the revenue, and about 5 times the operating income.
(this is compairing 2020 vs 2020 for both, notice that this was while Sony was launching the PS5, and had to deal with pandemic cutting profits in movies ect)

I dont know, I just think its priced high.
And it could be a bubble that bursts at some point.

*edit:
Someone check numbers, if I got them right or wrong somewhere.
I just did a quick look on a page, with stocks and might have miss read something.
But from what I saw/googled, this was what I came to. (x2 rev, and x5 operating income)

Last edited by JRPGfan - on 01 July 2021

padib said:
JRPGfan said:

All of the economy is based on perceived value, lies and illusion. The stock market is exactly in that trend.

Just as the soda you drink is not worth 1USD, that is also a lie and an illusion. But you pay it nonetheless.

Untill everyone stops buying soda, there is no reason for the price to collapse. Same idea here.

Coca cola here in denmark actually got cheaper over time.
Like for some reason, I remember back 10 years ago, prices where the same or higher.
And I swear we even added in a small sugar tax.

Sometimes coca cola is cheaper than water bottles.
Its cheaper than buying juice.

I think you used a bad case there to prove your point.
I wouldnt say coca is overpriced, even if they probably still have high returns on each sale.
(my point isnt that your not allowed to profit off of sales, ei. sell a item for more than the parts costs)

Its that the stock increase, doesnt match earnings or growth of the company.
Why would value go up 600%, if revenue is up like 33%?
The 2 are out of line, and clearly that reflects on the stock likely being over valued.
Its a bubble to me (too many people eating the lie, eventually it wont hold... and the bubble bursts)

MS and Apple are both valued at around 2T in stock.
However Apples annual revenue is like twice that of Microsofts.

I just assume with stocks, there would be some sort of correlation between revenue/profits, and the value of a company.
(reality is there doesnt appear to be such, which just feels "off" to me, like a illusion or trick.)

Last edited by JRPGfan - on 01 July 2021

JRPGfan said:

Thats my point.... "perceived value" is mostly just like a magic trick.
Its not real. However because enough people believe in a lie or illusion, it just keeps going.

Its like how theres more people that own gold, than there is gold in the world.
If everyone that has a claim on gold, took it back, there would be people left with their claim, on it, that couldnt get it.
And somehow the stock in gold is fine.

Its a deck of cards, build on lies (imo).
It has nothing to do with real value, or real numbers.
The fact that something can go up in price, simply because enough people by into it, is crazy.

edit:

2015  MS Annual Revenue $93,580 million USD.
2020  MS Annual Revenue $143,015 million USD.

now this is revenue and not profit.
Also inflation between 2015 and 2021 is like ~14%.


So growth is like 33% in revenue (no idea on profits).
While the company became 6 times as much worth in stocks?

Its crazy to me.
Stuff like this is what leads to bubbles in stockmarkets.
Sooner or later, enough people realise there is a issue, and things crash.
We gotta be close to a crash point, cuz that seems insane to me.

Bold: you hit the nail there: that's exactly how economy works. Do you know that there's more money owned by people that there is actual money in the world? If, for instance, all the customers of a given bank would want to withdraw all their money at the same time, they couldn't do it, because the bank wouldn't have as much money and would eventually run out of it before satisfying the needs of all its customers. That situation, however, is pretty much unlikely to happen, and that's why our economic system works: because we are confident that, when we go to the bank to withdraw money, we will be able to do it. But the only reason why banks have always enough money available is because, apart from those who withdraw it, there are also lots of people who deposit it - money is constantly moving.

And that's the case with money, but the exact same principles apply to literally anything that can be bought or sold (or just exchanged for other stuff, in general).

Also, you have to take into account that market capitalization is not actually the value of the stock; it's the value of the stock multiplied by the amount of stock in the wild. And the current value of Microsoft stock at this point in time is "just" around 270$. For comparison's sake, Sony stock is around 98$ (with a recent maximum of almost 120$ a few months ago, and an all-time high of almost 160$ a couple of decades ago), so it's not that much of a difference, if you put it that way.

Besides, another think that you have to take into account is that the fluctuations in prices are caused only by supply and demand (which are closely related to the perceived value): the price of Microsoft stock is rising right now because there are more people buying than there are people selling, but a time will come (when the circumstances dictate it) when people who bought Microsoft stock at a lower price will want to sell it to reap the benefits and, as a result, the price of the stock will fall. That, however, is not a bubble bursting - it's just the market functioning normally. In fact, I'm seeing in the graph that Microsoft stock rose from 5 to 60$ back then between the years 1995 and 1999, and then it fell down to 20$ in merely a year. That's called a market correction and it's not bad; on the contrary: it's necessary in order to maintain a healthy growth. And as of now, as I'm seeing, Microsoft stock has been rising for years, so you can hold no doubt that sooner or later it will see another big fall; more than probably not now (maybe in months or even years), but it will happen eventually.

But as I said, that's just normal market behavior: you can call that a bubble if you wish, but it's just how things work. In fact, it happened to Sony too in the early 2000s: its stock fell to almost 30$, yet look at it now: almost 100. Is that a bubble? Well, it may or may not be; the only certain thing is that that's the perceived value of its stock at this moment in time, and while that perceived value doesn't decrease, the price will not fall either.

And the same applies to the Coca-Cola stuff: if it's cheaper in your country than it is in others (in relative terms), it's probably because The Coca-Cola Company didn't see as much demand for it as they would've expected, and set a lower price in order to increase its perceived value and therefore incentivize the demand. So a can of Coca-Cola going cheaper or more expensive is not relevant; what is relevant is the fact that its price is determined by the market: it rises when there's more perceived value (and therefore demand) and falls when there's less, just as happens with stock. And that's because perceived value is all that matters in this world when it comes to economy. Is that a lie? Is that an illusion? Well, it quite probably is; but it's the same illusion upon which our whole economic system is build, which... admittedly, can be a bit scary if you think about it too thoroughly. But at the same time, it's been working for us more or less well for a very long time, so as long as enough people keep trusting this system, it will work just as fine.



I'm mostly a lurker now.