I was talking to a buddy of mine in my investment club about the decision whether to sell one of our holdings. While the content of the discussion (another growth vs. value discussion) was interesting unto itself, there was something that came out of it that caught my immediate attention – market cap of “new school” or disruptor companies versus established companies.
What is Market Capitalization?
Investopedia provides a pretty straightforward definition of Market Capitalization,
The total dollar market value of all of a company’s outstanding shares. Market capitalization is calculated by multiplying a company’s shares outstanding by the current market price of one share. The investment community uses this figure to determine a company’s size, as opposed to sales or total asset figures.
Comparing Market Capitalization of Disruptor Companies versus Old School Companies
Telsa VS. Other Car Companies
This is actually the stock we were talking about.
TSLA Market Cap – $34.72 Billion
GM Market Cap – $49.28 Billion
Ford Market Cap – $58.40 Billion
Sort of feels like the spread between Tesla and those other companies (with actual profits) should be larger?
Amazon VS. Other Retailers
Amazon Market Cap – $224.93 Billion
Walmart Market Cap – $236.36 Billion
Target Market Cap – $54.07 Billions
This one is really shocking one for me! How is Walmart only 5% more valuable than Amazon? and wow is Target much smaller than I expected!
Solar City vs Con Ed
Solar City Market Cap – $5.05 Billion
Con Ed Market Cap – $17.95 Billion
Con Ed has a profit margin of 10.23% while SCTY has a -217% profit margin!
I am sure there are a thousand other examples out there!