One of the more interesting numbers provided buy Bloomberg.com’s quote feature is the market
capitalization of a specific company. Market capitalization is the number of shares
outstanding multiplied by the current price of a share. In other words, generally what the
stock market perceives the value of the specific company. In perusing this information, I
found a few interesting comparisons.
Priceline.com is a company which
will search the main reservation systems looking for an airline which will accept your bid
for a specific airline ticket. United Airlines is the
nations largest airline, which employs thousands to maintain and fly over 300 aircraft.
The market values Priceline.com at a $10 billion; more than three times United’s
meager $3 billion evaluation.
Dell Computer manufactures PC’s by
assembling parts manufactured elsewhere, pretty much the same way my neighbor’s
teenager used to do in his basement. Interestingly, the market evaluates Dell at $105
billion; a little more than twice General Motors $40
billion evaluation. Aol.com, one of hundreds of companies
which delivers e-mail values out at $95 billion, while Federal
Express, which delivers the real physical stuff, checks in at $12 billion. Amazon.com, which sells books and CD’s on the
Internet checks in at $14 billion, about ten time that of Barnes and Noble which owns book
stores (including B. Dalton and several others) in every major shopping center.
Recognizing that I was missing the boat (again?), I decided to change our
name to Mentor.com and gave Robert Rubin at
Goldman Sachs a call to arrange for an IPO (initial
public offering). I figured Mentor was a good candidate; should be worth at least a
billion or two. After all, Mentor is in the Internet business, we now had .com in our
name, and we had a flashy web site. Bob Rubin was very interested and getting excited. But
then he asked the final question: "Did you make a profit last year?"
When I replied that we did indeed make a few dollars last year, he hung up
the phone on me.
Until next time :>)
