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A comment on Satya Nadella Added $850B to Microsoft.

Re:Satya Nadella Added $850B to Microsoft by WooShoa on Thursday November 21, 2019 @11:43AM (#21596024)
Does anyone know what this $850,000,000,000.00 looks like in reality? Where was that value created?

Did they sell that many more … what exactly? I am just trying to understand where that value is.

Or was this essentially all stock buybacks that artificially inflate the "value" as established by the market cap?

Ironically too is that when you control the MSFT market cap against the Trump inflated stock market, there is actually no actual gain, especially when you control for stock buybacks, aka, corporate stock self-inflation.

[ Parent | on HN ]
Re:Satya Nadella Added $850B to Microsoft by cheez on Thursday November 21, 2019 @12:18PM (#21596569)
850 billion can be broken down by:

* Long term customers gained

* Goodwill created

* New products

All of this reduces to "discounted future revenue". Say you have a 10 year target on MSFT. Do you think MSFT will make $850 billion dollars more in the next ten years than they did in the last ten years? MSFT revenue has doubled in the last ten years. Even if it does not grow at all, they will earn around $1T in the next ten years as compared to (about) $800 billion in the last ten.

Edit: and if you DO think it will grow then perhaps $850B of value is perhaps the top line.

[ Parent | on HN ]