Apple for the day

Nick Wingfield has an article in The New York Times about Apple:

Apple, a company that nearly filed for bankruptcy just sixteen years ago, passed a very different sort of milestone when a bump in its share price made it the most highly valued public company ever.
Apple already boasted the largest market value of any public company, a title it has held since toppling Exxon Mobil from that spot. But Microsoft still held onto the record for the biggest market capitalization ever, $616.34 billion, which it set at the close of trading on 27 December 1999, according to Howard Silverblatt, an analyst at S&P Dow Jones Indexes. Apple blew past that mark when its stock surged over two and a half percent on Monday to close at $665.15, giving it a market value of $623.52 billion. The short-term explanation for the rise in its stock is the investor euphoria that often accompanies new product announcements from Apple— in this case, the expected introduction of a new iPhone in mid-September that could give a jolt to sales.
But the longer-term story behind the stock price is a corporate turnaround with few, if any, equals. The Apple that Steve Jobs arrived at when he rejoined the company in 1997 was, in his own words, in a precarious state, with a bloated inventory, a sprawling line of mediocre products and dwindling cash reserves.
Apple’s situation was so bad that Michael S. Dell, chief executive of the computer maker Dell, told an audience at a conference that, if he was running Apple, he would “shut it down and give the money back to shareholders.”
The Apple that Jobs left behind, when he died of cancer last October, had reinvented itself multiple times under his watch, first with the iPod, then the iPhone, and then the iPad. At an industry conference in 2010, Jobs described seeing Apple pass the market value of Microsoft, its longtime rival and long the most highly-valued of technology companies, as “surreal”.
If Jobs were still alive, he could add up the values of Microsoft, Intel, and Google and still have more than thirteen billion dollars of daylight between that figure and Apple’s market capitalization, which is a company’s stock price times its outstanding share count.
“It has been an absolutely remarkable transformation,” said Charlie Wolf, an analyst at Needham & Company.
Another analyst, Horace Dediu of Asymco, noted that Microsoft’s 1999 market value was still far higher than Apple’s when adjusted for inflation. The Microsoft of late 1999 would be worth $850 billion in today’s dollars. The Microsoft of August of 2012 is worth $258 billion.
By Silverblatt’s calculations, Apple needs to close at $910 to beat Microsoft’s inflation-adjusted market value. It is worth noting that Microsoft achieved its pinnacle back when high-flying technology and Internet stocks had yet to be humbled by the bursting of the Internet bubble. Microsoft never regained the favor of investors after that happened, even as it delivered strong growth in revenue and profits. Investors have become increasingly concerned about the growth prospects of companies dependent on sales in the traditional computer business.
Apple, however, has seen great leaps in its value during the last four years, a period of great economic uncertainty. In 2006, after Apple passed the market value of Dell, Jobs couldn’t resist pointing out the flaws in Dell’s assessment of Apple. “Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today,” Jobs wrote in a note to Apple employees. (On Monday, the market value of Dell was just under $22 billion.)

Rico says the difference is that Apple has a chance of hitting nine hundred bucks a share, while Microsoft will be lucky to avoid going to zero. (And those other guys? They can go to Dell...)