Technology companies, including those who have mastered the digital entertainment space, are some of the most successful companies in the world. A key indicator of this is their share price growth, and we are amazed at how technologies have evolved over the years.
Companies like Netflix and Amazon started their initial public offerings (IPO) around two decades ago. The price of their shares has now gone through the roof.
Then there is Google, Apple, Facebook and Tesla – each a giant in the world of technology, services and business. Among them, Apple was the only major player in the stock market at the turn of the century.
Driven by constant innovation and smart choices, companies have made their phenomenal rise, which in turn benefits both companies and their shareholders.
Investing in stocks is considered one of the most profitable ways to grow your wealth, provided you can – to borrow the famous catchphrase from The Rock – “smell what’s boiling”. Market analysts and investors can learn lessons from the price growth of these companies.
To put it simply, someone who might have bought just a single share of Apple in 1980 is now rolling in greenbacks. The same goes for a shareholder in Amazon, a company that has seen a rate of growth like no other.
Take a look at these big tech players that have been a boon for investors who have had confidence from the start.
(Main image: Tech Daily / Unsplash)
(Selected image: Patrick Weissenberger / Unsplash)
One of the most successful technology companies in the world, Apple Inc., has become an integral part of the daily lives of millions of people around the world. From the iconic iPhones and Macs to advanced wearables, tablets, home technology and the most popular virtual assistant, Siri, Apple has been at the forefront of a technology revolution that has changed the user experience.
Its tremendous popularity and ability to bring products to market that are more advanced than before directly affects stock prices. Because of this, Apple stock is one of the most profitable investments. In August 2020, it became the first publicly traded US company to surpass the valuation of $ 2 trillion (RM 8.3 trillion).
The highest Apple share price ever offered was around $ 702 (2,910) in September 2012. So why is the stock trading at $ 145 (RM601) at the time of writing on Aug. 27, 2021?
To a layman, it would appear that a stock that was worth $ 22 (RM 91) in 1980 has only risen six times to date. But that’s a long, long way to go.
The answer to this “confusion” is called split.
According to Apple’s Investor Relations FAQ: “Apple went public on December 12, 1980 at a price of $ 22.00 per share. The stock has split five times since going public, so the share price on a split-adjusted basis was $ 0.10. “
Every time Apple shares seemed to go through the roof, they were split up to ensure new investors could buy shares. Shareholders own more shares after a split, but the value of each of them is divided among the newly created shares. The market capitalization remains the same.
If you calculate the price-based split-adjusted technique, the value of a single Apple share has risen by at least 144,900 percent from the date of the IPO in 1980 to August 27, 2021; a share purchased at the time valued at $ 22 now costs about $ 32,000. Dollars (132,704 RM).
And its value only increases.
When Netflix went public on May 23, 2002, even the best market experts had no idea that it would become one of the largest OTT platforms in less than two decades.
With more than 200 million subscribers in 190 countries, Netflix rules the world of streaming like no other platform. It has redefined home entertainment and is expanding its presence year on year.
Like Apple, Netflix shared its shares – twice.
At inception, a share was priced at $ 15 (RM 62). The split-adjusted IPO price is $ 1.07 (RM 4.40) because a stock bought on the date it was listed in 2002 after a 2-to-1 split in 2004 and a 7-to-1 split into 14 to 14 shares resulted in 2015.
So while the current Netflix share price is $ 548 (RM 2,272), the value of a share of $ 15 (RM 62) after adjusting for splits is up around 51,301 percent. So if you had bought one Netflix share on May 23, 2002, you would have 14 Netflix shares today, valued at $ 7,672 (31,816) RM.
The social networking giant Facebook went public on May 18, 2012. In the nine years since going public, the company, led by Mark Zuckerberg, has never had a stock split.
At the time of launch, the social media platform’s share was priced at $ 38 (RM158) per share. Its share price growth is steady. Today it’s $ 364 (RM 1,510) per share – an 857 percent increase or nearly nine times the original price.
So if you bought 1,000 shares of Facebook for $ 38,000 (RM 158,000) on May 18, 2012, they are now worth $ 364,000 (RM 1.5 million). That’s a decent return on investment in nine years from a company that will only get bigger in the years to come.
In its second quarter 2021 results released on July 28, 2021, Facebook said its daily active users increased 7 percent year-over-year to an average of 1.91 billion. Net income increased 101 percent year over year.
Tesla is a household name in the electric vehicle world. In fact, Tesla can be credited with accelerating the use of sustainable and clean energy through the manufacture of electric vehicles.
On June 29, 2010, Tesla went public at a price of $ 17 (RM 70) per share. Today, its stocks are the top performers in the auto industry and one of the top performers among big tech companies.
Tesla has only had one split since launching its IPO on August 31, 2020. That 5-to-1 split meant that the holder of one Tesla share before the split became the holder of five shares after the split.
Tesla stock is trading above $ 700 (RM 2,902) today. That is, someone who bought a share for $ 17 in 2010, for example, now holds five shares valued at $ 3,500 (RM 14,514). The split-adjusted percentage increase in the value of Tesla shares is around 20,490 percent.
The jump is phenomenal and there is every possibility that it will go higher than it is today.
Tesla is at the forefront of a vehicle revolution, producing nearly 500,000 cars in 2020. In March 2020, Co-Founder and CEO Elon Musk announced on Twitter that the company had made its millionth car.
Founded 27 years ago by Jeff Bezos, Amazon went public on May 15, 1997.
The price of a single share at the time was $ 18 (RM 75). Between 1997 and 1999, Amazon split its shares three times. While the first two were 2 to 1, the last was a 3 to 1 split. This means that the owner of a share now has 12 shares when it goes public.
At $ 3,316 (RM 13,751) per share, Amazon is one of the most expensive stocks on the market right now. So 12 shares are valued at $ 39,792 (RM 165,017) – an incredible 220,966 percent increase in the share price on a split-adjusted IPO price.
The pandemic has boosted Amazon’s sales. According to The Associated Press, the company’s revenue growth rate jumped 35 to 40 percent by May 2020, compared to 20 to 21 percent in the days leading up to the pandemic. The momentum continued through the first quarter of 2021, with the growth rate climbing to 41 percent.
It is not an exaggeration to say that Google is now synonymous with the Internet. A simple search engine, founded by Sergey Brin and Larry Page on September 4th, 1998, has virtually control over people’s lives, whether or not someone sees it.
Google went public on August 19, 2004 for $ 85 (RM 352) per share. After a reorganization in 2015, Google became a subsidiary of Alphabet. The Google shares traded today are therefore the shares of Alphabet.
Unlike most big tech companies, Google has three different types of stocks – Class A, Class B, and Class C. Only Class A (NASDAQ ticker GOOGLE) and Class C (NASDAQ ticker GOOGLE) are traded.
Class B is held by the founders and other key people in the company. Class A shares have voting rights, while Class C shares have no voting rights. Class B Shareholders have even more control over voting than Class A Shareholders.
Long story short, there isn’t much of a difference between the prices of Class A Shares and Class C. While Class A was trading at $ 2,842 (RM 11,785), Class C was trading at 2,856 at the time of writing US dollars (RM 11,843) are traded.
Both classes were created in 2014 when Google did its first and only split. Thanks to the 2-to-1 split, owners of one Google share could hold onto another. Without going into detail about how this affected voting rights, let’s just say that the $ 85 is now worth $ 5,700 (RM 23,638).