IBM, Microsoft, Sun Microsystems, HP, & Apple: IBM, Microsoft, Sun Microsystems, HP, & Apple Bion Porzio
May 16, 2007 Presentation Overview: Presentation Overview Dot.com “bubble burst” of 2000
How each IT company has fared since
Question for the class Dot.com Bubble: Dot.com Bubble Economic bubble lasting from 1995-2001
Value increased in Internet and technology stocks
Rise of “dot.com” businesses
Stock prices, individual speculation, venture capital all increased
Companies focused on market share, investment and future promise; not profitability
“Bubble burst”- failure of dot.coms, recession
International Business Machines Corporation (IBM): International Business Machines Corporation (IBM) Founded: 1889
Market Capital: $157.36 Billion
Share Price: $105.98 (May 11, 2007)
Last Annual Earnings: $11.9 Billion
Last Annual Revenues: $91.4 Billion
Main Products: hardware, software, consulting services, hosting services, infrastructure services
Since Bust: Not hurt, market leader in services because of previous reorganization
IBM 10 year stock price: IBM 10 year stock price
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=US%3AIBM Apple Inc.: Apple Inc. Founded: 1976
Market Capital: $94.03 Billion
Share Price: $108.74 (May 11, 2007)
Last Annual Earnings: $2.4 Billion
Last Annual Revenues: $19.3 Billion
Main Products: Computer hardware, software, consumer electronics
Employees: 17,787 (full-time), 2,399 (temporary)
Since Bust: Ipod and Itunes saved company, stock soared, needs to continue to grow Apple Inc 10 year stock price: Apple Inc 10 year stock price
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=AAPL Hewlett Packard (HP): Hewlett Packard (HP) Founded: January 1st, 1939
Market Capital: $121.08 Billion
Share Price: $45.24(May 12, 2007)
Last Annual Earnings: $6.5 Billion
Last Annual Revenues: $91.7 Billion
Main Products: personal computing and other access devices, imaging and printing-related products and services, enterprise information technology infrastructure and multi-vendor customer services
Employees: over 140,000 people in 178 countries
Since Bust: PC segment is booming (pushed Dell out as #1 PC maker), Different from competitors in terms of what they offer.
HP 10 year stock price: HP 10 year stock price
Microsoft: Microsoft Founded: 1975
Market capital: $296 billion
Share price: $30.95
Last annual earnings: $12.6 billion
Last annual revenue: $44.28 billion
Main Products: Microsoft Windows operating system, Microsoft Office suite, Microsoft Servers, Xbox.
Since Burst: Grew dramatically in 1990’s. Presence around the world allowed them to recover nicely from the burst. In 2001 released Windows XP which helped in transition to overcoming the bust and into the millennium. Microsoft 10 year stock price: Microsoft 10 year stock price
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=MSFT Sun Microsystems: Sun Microsystems Founded: 1982
Market capital: $18.2 billion
Share Price: $5.11
Last annual earnings: -$157 million
Last annual revenue: $13.87 billion
Main Products: UNIX Computer servers, workstations, storage, Java-based software and services.
Since Burst: Pre-burst: Dramatic growth in all areas. 2001 burst hit them hard. Relied heavily on hardware sales. Repeated layoffs and consolidation of manufacturing operations. Linux servers gained popularity because of the substantially lower expenses due to the open-source software and helped in recovery. Sun Microsystems 10 year stock price: Sun Microsystems 10 year stock price
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=US%3ASUNW Future Implications: Future Implications Dotcom Bubble burst (2001)
Resulted from public bubble funded by Wall Street.
Immense initial public offerings created a gullible public whose money propped up companies that should have never been in business.
Web 2.0 Explosion
Resulting from a private bubble financed by venture capital.
Venture capital investments are small in comparison.
Current business model is “build to flip” – start a small company and sell it to the highest bidder. Questions: Questions Now that you have a better understanding of these particular companies:
which company listed above would you invest in for the next ten years if you had $100,000 and left it in one company for a decade without taking it out? Why?