Financial fruit: Apple becomes 1st trillion-dollar company
Company had been close to bankruptcy in 1997
San Francisco — Apple is the world’s first publicly traded company to be valued at $1 trillion, the financial fruit of stylish technology that has redefined what we expect from our gadgets.
The milestone reached Thursday marks the latest triumph of a trend-setting company that two mavericks named Steve started in a Silicon Valley garage 42 years ago.
Apple’s shares gained $5.89 to close at $207.39, leaving the company’s market value a notch above $1 trillion — around $1,001,679,220,000, according to FactSet. Apple sits atop a U.S. stock market that has become dominated by technology-centered companies: Amazon, Google’s parent Alphabet, Microsoft and Facebook round out the top five in market value.
The achievement seemed unimaginable in 1997 when Apple teetered on the edge of bankruptcy, with its stock trading for less than $1, on a split-adjusted basis., and its market value dropping below $2 billion.
To survive, Apple brought back its once-exiled co-founder, Steve Jobs, as interim CEO and turned to its archrival Microsoft for a $150 million cash infusion to help pay its bills.
If someone had dared to buy $10,000 worth of stock at that point of desperation, the investment would now be worth about $2.6 million.
Jobs eventually shepherded a decade-long succession of iconic products such as iPhone that transformed Apple from a technological boutique to a cultural phenomenon and moneymaking machine.
The stock has been surging this week as anticipation mounts for the next generation of iPhone, expected to be released in September.
Although iPhone sales aren’t rising as rapidly as they were a few years ago, Apple has been adding enough new features to persuade consumers to pay higher prices for its top-of-the line devices. In its most recent quarter, Apple fetched an average price of $724 per iPhone — a nearly 20 percent increase from an average of $606 per iPhone at the same time last year.
The price escalation has widened Apple’s profit margins to the delight of investors, who have boosted the company’s market value by about $83 billion — nearly equal to the entire market value of American Express — since the quarterly report came out late Tuesday. The 9 percent gain was Apple’s biggest two-day advance in nearly a decade.
Apple’s stock has climbed by 23 percent so far this year, compared to a 6 percent gain for the Standard & Poor’s 500 index.
The recent rally in Apple’s stock contrasts sharply from a deep downturn in the fortunes of two social media companies, Facebook and Twitter that offer some of the most popular apps used on iPhones and other mobile devices.