Musings on Markets

SEPTEMBER 5, 2024

That drop of more than $200 billion in market capitalization in response to what looked like good news, at least on the surface, puzzled market observers, though, as is their wont, they had found a reason by day end. Download spreadsheet As always, the normal caveats apply.

Marketability 136

Marketability Start-ups Discounted Cash Flow Market Capitalization 136

Musings on Markets

NOVEMBER 1, 2023

It was after one of these downturns in 2019, when the stock hit $180 (with a market cap of $32 billion), that I bought Tesla for the first time , albeit labeling it as my corporate teenager, an investment that would frustrate me because it would get in the way of its own potential.

Start-ups 126

Start-ups Marketability Market Capitalization Beta 126

Audit Board

APRIL 26, 2023

Download the full ebook here, and continue reading to learn how financial institutions can optimize collaboration between the three lines to break through silos and improve overall risk mitigation. Market capital requirements on midsize banks. Interest rate management. Asset liability management. Bank liquidity requirements.

Compliance 52

Compliance Banking Market Capitalization Technology 52

Andrew Stolz

FEBRUARY 7, 2022

Highlights: End markets mature, no opportunities to grow. Download the full report as a PDF. It measures of how much free cash flow the company generates annually relative to the company’s size as measured in market capitalization. Download the full report as a PDF. Sideward movement could last much longer.

Dividends 52

Dividends Net Debt EBIT Marketability 52

Musings on Markets

NOVEMBER 15, 2022

In this post, I want to focus on that point, starting with a discussion of why stories matter to investors and traders and the story that propelled the company to a trillion-dollar market capitalization not that long ago. billion in revenues in 2021.

Start-ups 99

Start-ups Marketability Market Capitalization Technology 99

Musings on Markets

NOVEMBER 9, 2021

The graph below contains Tesla's stock price, adjusted for stock splits, going back to 2010, and ending in November 2021: While the graph illustrates the surge in the stock price, the table embedded in the graph conveys the rise more vividly, by listing Tesla's market capitalization in millions of dollars.

Start-ups 101

Start-ups Dividends Marketability Market Capitalization 101

Musings on Markets

OCTOBER 4, 2021

To both sides, my defense is that this is my story and valuation, and it will drive my investment, but that you are welcome to download the spreadsheet , change the inputs that you disagree with and come up with your own valuations. YouTube Video Spreadsheets to download Valuation of Paytm (for IPO). 2950 is for unlisted shares.

Start-ups 96

Start-ups Banking Marketability Technology 96

Musings on Markets

JANUARY 9, 2021

While the universe of companies is diverse, with approximately half of all firms from emerging markets, it is more concentrated in market capitalization, with the US accounting for 40% of global market capitalization at the start of the year.

Risk Premium 52

Risk Premium Market Capitalization Equity Start-ups 52

Musings on Markets

FEBRUARY 8, 2025

Broken down into industries, and ranking industries from highest to lowest costs of capital, here is the list that emerges: Download industry costs of capital The numbers in these tables may be what you would expect to see, but there are a couple of powerful lessons in there that businesses ignore at their own peril.

Risk Premium 74

Risk Premium Beta Start-ups Equity 74

Musings on Markets

OCTOBER 6, 2023

A more tangible way to see why intangibles have become a hot topic of discussion is to look at the evolution of the top ten companies in the world, in market capitalization, over time: In 1980, IBM was the largest market cap company in the world, but eight of the top ten companies were oil or manufacturing companies.

Intangible Assets 128

Intangible Assets Book Value Equity Start-ups 128

Musings on Markets

FEBRUARY 2, 2023

To fill in the missing pieces, I redid the valuation picture, adding the revenue growth rate, by year: Download spreadsheet As you look at the sheet, it is worth emphasizing a few estimation details that you may have missed in my original post: First, the revenue growth rate , at least for me, is a means to an end, not an end in itself.

Start-ups 99

Start-ups Risk-free Rate Market Capitalization Marketability 99

Musings on Markets

SEPTEMBER 11, 2023

While Napster downloads left much to be desired in terms of audio quality, and the company walked to (and often beyond) the very edge of legality, it exposed the weaknesses in the music business, from how new artists were found and marketed, to how their music was packaged and finally, how that music was sold.

Start-ups 83

Start-ups Market Capitalization Marketability Technology 83

Musings on Markets

DECEMBER 2, 2020

For instance, if the market capitalization of Airbnb today is $60 billion, you would need it to deliver gross billings of $200 billion in 2031, with an operating margin of close to 35%. In fact, it is these differences that allow for buyers and sellers to co-exist in the market.

Start-ups 52

Start-ups Marketability Equity Market Capitalization 52

Musings on Markets

JANUARY 19, 2022

I report a dataset containing annual returns on stocks, going back to 1928 , and to put 2021 in context, I looked at the historical returns on the index: Download historical returns on US stocks Looking at the 94 years in this dataset, the returns in 2021 would have ranked 20th on the list , good, but not exceptional.

Risk Premium 99

Risk Premium Risk-free Rate Start-ups Equity 99

Musings on Markets

SEPTEMBER 9, 2024

While management decisions have clearly contributed to the problems, it is also true that the pharmacy business, which forms Walgreen's core, has deteriorated over the last two years, and that can be seen by comparing its market performance to CVS, its highest profile competitor.

Start-ups 135

Start-ups Marketability Market Capitalization Equity 135

Musings on Markets

JUNE 23, 2023

As the semiconductor business has acquired heft, in terms of revenues and profitability, investors have priced those operating results into the market capitalization assigned to these companies. Over time, I will assume that this cost of capital will drift down towards the overall market average cost of capital of 8.85%.

Start-ups 104

Start-ups Marketability Market Capitalization Technology 104

Musings on Markets

MARCH 19, 2022

The table below summarizes the market cap change, by region of the world: It is no surprise that Eastern Europe and Russia, which are in the eye of the hurricane, have seen the most damage to equities, but other than the Middle East, every other equity market in the world is down, with the US, EU and China shedding significant market capitalization.

Start-ups 100

Start-ups Risk Premium Equity Market Capitalization 100

Musings on Markets

JANUARY 8, 2022

Regional Breakdown My data sample for 2022 includes every publicly traded firm that is traded anywhere in the world, with a market capitalization that exceeds zero. You can find the data to download on my website , at this link. It is also why I report only aggregated data on industries, rather than company-level data.

Risk Premium 99

Risk Premium Start-ups Market Capitalization Corporate Finance 99

Musings on Markets

MAY 7, 2023

Obviously, you will have very different views about Citi than I do, and you are welcome to download the spreadsheet and input your numbers not just for Citi, but for any bank. The Pricing of Bank Equity You have heard me say this before, but I don't think there is any harm in repeating this. at the end of 2022 to 0.94 in May 2022.

Banking 86

Banking Price to Book Dividends Book Value 86

Musings on Markets

MARCH 25, 2021

To see how changes in interest rates play out in equity markets, I started with a simple, perhaps even simplistic adjustment, where I look at quarterly stock returns and T.Bond rates at the start of each quarter, to examine the linkage. In January, the NASDAQ continued its 2020 success, and the S&P 500 lagged, losing value.

Equity 52

Equity Risk-free Rate Treasury Start-ups 52

Musings on Markets

FEBRUARY 27, 2023

In fact, at a zero percent tax rate, the optimal debt ratio, if you define it as the mix that minimizes cost of capital is zero. Book versus Market : The book debt ratio is built around using the accounting measure of equity, usually shareholder's equity, as the value of equity.

Equity 52

Equity EBITDA Start-ups Net Debt 52

Reynolds Holding

JULY 10, 2024

Epilogue By the time I became Enforcement Director in July 2021, the SEC had already brought dozens of enforcement actions to address widespread noncompliance in the crypto markets. Meanwhile, four months later, the combined market capitalization of crypto assets reached approximately $3 trillion. [49] 16, 2023), [link]. [48]

Marketability 49

Marketability Technology Finance Compliance 49

Musings on Markets

FEBRUARY 4, 2023

Given the historical roots of the biggest Indian family groups, the Adani Group has been a recent entrant, not making the top ten list (in terms of either operating metrics like revenues or market-based numbers like market capitalization or enterprise value) as recently as ten years ago, and barely making the top ten list five or six years ago.

Start-ups 100

Start-ups Market Capitalization Marketability Equity 100

Musings on Markets

JANUARY 17, 2025

In my last post , I noted that the US has extended its dominance of global equities in recent years, increasing its share of market capitalization from 42% in at the start of 2023 to 44% at the start of 2024 to 49% at the start of 2025.

Equity 129

Equity Risk Premium Treasury Start-ups 129

Musings on Markets

MAY 3, 2025

of the overall market capitalization of all US companies at the start of 2025, lost $2.34 trillion (about 13.19%) in market capitalization in the first quarter of 2025. Focusing just on US equities, technology companies, which accounted for 29.4% trillion that they lost in the first week of the month.

Marketability 95

Marketability Start-ups Treasury Risk Premium 95

Musings on Markets

APRIL 20, 2025

For the market, it is often built on papers (or books) that look at the historical data on what equity markets have delivered as returns over long periods, relative to what you would have made investing elsewhere.

Start-ups 136

Start-ups Price to Book Marketability Equity 136

Musings on Markets

MARCH 15, 2025

Disruption's Winners and Losers The obvious winners from disruption are the disruptors, but since many of them scaled up with unformed business models, the payoff is less in the form of profits, and more in terms of their market capitalizations, driven by investors dazzled by their potential.

Start-ups 132

Start-ups Risk Premium Marketability Equity 132

Musings on Markets

FEBRUARY 6, 2025

It is for this reason that I chose to compute returns differently, using the following constructs: I included all publicly traded stocks in each market, or at least those with a market capitalization available for them. I converted all of the market capitalizations into US dollars , just to make them comparable.

Risk Premium 69

Risk Premium Start-ups Enterprise Value Equity 69