Face­book worth more than Wal-Mart

The China Post - - WORLD BUSINESS - BY BAR­BARA OR­TU­TAY

Face­book is now big­ger than Wal- Mart, at least when it comes to its value on the stock mar­ket.

The world’s big­gest online so­cial net­work knocked the world’s largest re­tailer out of the top 10 list of the high­est- val­ued com­pa­nies in the Stan­dard & Poor’s 500 in­dex on Mon­day and the gap widened on Tues­day.

While the switch is mostly sym­bolic — noth­ing spe­cific hap­pened this week to war­rant it, and the dif­fer­ence be­tween the two giants is not that big — it sig­nals in­vestors’ in­sa­tiable ap­petite for suc­cess­ful tech stocks. Ap­ple, Mi­crosoft and Google top the list of the high­est- val­ued com­pa­nies in the U. S., and Face­book looks to be on its way to join­ing them.

A com­pany’s mar­ket value is cal­cu­lated by mul­ti­ply­ing the num­ber of shares of stock it has in cir­cu­la­tion by the cur­rent price of one share.

Face­book Inc. was val­ued at US$ 238 bil­lion in Tues­day af­ter­noon trad­ing, ac­cord­ing to Fac­tSet. Its stock was up US$ 2.77, or 3.3 per­cent, at US$ 87.51.

Wal- Mart Stores Inc. was val­ued at US$ 234 bil­lion. Its stock dipped 30 cents to US$ 72.49.

Face­book, which is based in Menlo Park, Cal­i­for­nia, has been on a roll this past year, its shares up about 34 per­cent in the past year com­pared with just 8.2 per­cent for the S& P 500 in­dex. Its quar­terly re­sults have con­sis­tently sur­passed ex­pec­ta­tions.

Bentonville, Arkansas- based Wal- Mart, mean­while, asked for in­vestor pa­tience af­ter its mostre­cent earn­ings re­port showed a 7 per­cent profit de­cline due to the ef­fects of the strong dol­lar and higher worker wages and spend­ing on its online oper­a­tions.

Com­par­ing the two com­pa­nies’ fi­nan­cial re­sults, though, shows just how much Wall Street is in­vest­ing in growth and po­ten­tial — Face­book — ver­sus ex­ist­ing size and might — Wal- Mart. In the first three months of this year, Face­book’s to­tal rev­enue of US$ 3.54 bil­lion amounted to just a lit­tle more than Wal- Mart’s to­tal profit for its fis­cal first quar­ter of US$ 3.34 bil­lion. But while Face­book saw rev­enue grow 42 per­cent in the same pe­riod, Wal­Mart’s de­clined slightly.

That said, none of the nine com­pa­nies that fol­low Ap­ple in the top 10 come even close to the mighty iPhone and Mac maker, whose mar­ket cap­i­tal­iza­tion is about US$ 735 bil­lion.

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