Yesterday, numerous news outlets (including ourselves, based on data from Yahoo Finance) reported that Apple had reclaimed its $1 trillion crown.
However, a filing made late Wednesday reveals that Apple has not actually hit that milestone just yet. A company’s market cap is calculated by multiplying a company’s outstanding shares by the market price of one share. As a result of Apple’s continuing share buyback program, there are fewer outstanding shares available.
By our reckoning, Apple hit a share price high of $214.94 yesterday. That exceeds the $207.05 that Apple passed last summer to initially become a $1 trillion company. This followed investors’ enthusiasm after this week’s quarterly earnings triumph.
In Apple’s last quarterly filing, it revealed that it had 4.72 billion shares outstanding. By that reckoning, the company reclaimed its $1 trillion value on Wednesday. This is how news outlets calculated the figure for yesterday’s reports.
But a filing made late Wednesday shows that Apple now has just 4.601 billion shares outstanding, as of April 22. This means that Apple needs to hit $217.34 to reach $1 trillion.
The $1 trillion club
Since Apple reached its $1 trillion landmark last summer, both Amazon and Microsoft have also joined (and then left) the $1 trillion club. While this is certainly a massive achievement, however, Tim Cook was quick to note that Apple’s landmark doesn’t change much for the company. Last summer, he said that hitting the $1 trillion mark was “not the most important measure of our success.”
AAPL’s closing price yesterday was $210.52. Given that Apple only has to climb $7 to reach $1 trillion, it seems that it probably won’t take too long. This $1 trillion quibble may therefore quickly become a footnote.
In fact, according to investor Gene Munster, the whole $1 trillion market cap may quickly be left in Apple’s rear mirror. The noted investor recently argued that Apple stock is set to rocket up 70% in the next two years. This would make it a $1.5 trillion company.