Yeah, I was referring to stock price. Although this has confused me, wouldn't it be easier for stock prices to follow company worth.

Someone explain stockprices to Sam (FishyJoe, I'm looking in your direction ;) )

I'm not much of a stock person, but I can break it down like this, simply:

A company who's stock price is 100 bucks and has only 1 million shares is not worth more than a company who's stock price is 25 bucks and has 100 million shares.

Savvy?

Company A: 8 thousand shares at $40.00 (8000*40= $320,000)
Company B: 380 million shares at $3.50 (380,000,000*3.5= $1.3 trillion)

Since Company A has a higher stock price, it's a bigger company? Right...


I never really understood those Sony fans (not saying anyone here, just in general some people I have met in my life) who have the notion that Sony is like the greatest/largest/best company in the world. On the global scheme of things, it's not that big. Heck Panesonic's parent company is bigger than it.

How come there aren't any Panesonic fans? Or Proctor & Gamble fans? Or Merck fans? Or GeneralElectric fans?

_{Well there are General Electric fans... but, well, those are fans, you know like that electric fans you see in people's houses? Oh nevermind...}

The stock price basically represent the price at which people are willing to buy a piece of a company. The size of that piece is dependent on how many shares have been issued.

 maybe... they don't make games?  or gadgets?  it's kind of hard to get excited over toothbrushes or ibuprofen...

   panasonic also makes lots of fans

Sometimes they split the shares.

IE the stock price is $1000 and they declare that from then on each old share will be worth 10 new shares, at $100 each.

I'm no finance nerd but that makes me think that in the grand scheme of things, the value per stock doesn't matter much.

revenue comparison:

Sony: $68 bln
Matsushita (panasonic parent): $75 bln
GE: $164 bln

It doesn't. Only when you add up the combined value of every stock in existence do you get any kind of indication of a company's worth.

(Note: if you have trouble navigating the Forbes website, just do a search/find for "Sony" or "Microsoft" or whichever company I'm referencing on the given page).

You've got this all twisted. First, yes, that 26 billion is revenue. As can be seen here:

http://www.forbes.com/lists/results.jhtml?passListId=18&passYear=2005&passListType=Company&searchParameter1=unset&searchParameter2=unset&resultsHowMany=100&resultsSortProperties=%2Bnumberfield1%2C%2Bstringfield2&resultsSortCategoryName=rank&fromColumnClick=true&bktDisplayField=&bktDisplayFieldLength=&category1=category&category2=category&passKeyword=&resultsStart=101

Sony's total net profit for the entire fiscal 2005 was .8 billion dollars. That's all their divisions, not just gaming, all over the world. Their profits last year were approximately 1.5 billion dollars -- largely thanks to the Bravia Television, apparently, and not to Playstation. Here is a listing about the Bravia:

http://bloomberg.com/apps/news?pid=20601087&sid=aAQ16Hzzwzuc&refer=home

And now one about overall profits.

http://www.forbes.com/lists/2006/18/Profits_3.html

By contrast, Microsoft's profits last year were 13 billion, or approximately 9 times that of Sony.

http://www.forbes.com/lists/2006/18/Profits_1.html?boxes=custom

Also on this list, you can see why your "Sony stocks are worth more than Microsoft stocks" is not a valid calculation. The reasoning is simple: different companies have different amounts of stock. For example, imagine I am the sole owner of small but succesfull private business that is worth 1 million dollars. In effect, this means I own the single "stock," and that individual stock is worth one million dollars. Does this mean I'm worth more than Sony? Of course not. Sony's stock is currently worth approximately 52.5 dollars (give or take the last week's change), which is 1/20000 the value of my company's single stock... but there are millions if not billions of Sony stocks, instead of just 1, so you have to multiply. It's not just the value of a single stock, it's the number of them. In fact, when prices get very high, stocks split -- so, for example, the next time Microsoft stock reaches 200 dollars per share, the stock will split: there will immediately be twice as many shares in existance (With each owner having twice as many as before), but each individual stock will be worth 100 dollars.

So the way to calculate value is (Number of Stock) x (Value of Stock) = Market Value. This is listed on the Forbes site as well. Microsoft's Market Value is 279.02 Billion:

http://www.forbes.com/lists/2006/18/Profits_1.html?boxes=custom

While Sony's is 47.75 billion:

http://www.forbes.com/lists/2006/18/Profits_3.html

Meaning that Microsoft is approximately 7 times bigger than Sony in overall value. Last year, Sony made about twice as much profit as Nintendo, and their market cap was approximately twice that of Nintendo, but now Nintendo's market cap is higher than Sony's (making Sony the least valuable company of the three), and Nintendo profits are surging, and could very well end up being higher this year than all of Sony's net profits. Either way, Sony is much closer to Nintendo than it is to Microsoft.

Also relevant are cash reserves -- how much money each company has in reservation for expenditure or hard times. Microsoft is an absolute beast in this regard; they have 49-50 billion in cash reserves.

http://seattlepi.nwsource.com/business/131322_msftearn18.html

Nintendo has reserves of approximately 7 billion (listed in the middle of the page, just do a search for the word "reserve"):

http://www.dfcint.com/game_article/feb03article.html

And Sony has the smallest reserves of the 3, at approximately 5 billion. Here's a complete listing of some major companies to give you an idea how reserves stand, and as you can see, Microsoft dwarfs everyone (not just the video game business, everyone):

http://blogs.business2.com/apple/2007/06/apples_cash_res.html

Hope that helps!

I heard that when Microsoft started, Bill Gates set himself the goal of always having enough money in cash reserves to keep Microsoft able to work for at least 2 years with no revenue (ie. without selling a single thing, just spending money on salaries and operation).

As far as I know, that goal has been accomplished.