Facebook has become the seventh company to reach a stock market value of more than one trillion dollars. In late trading on Monday (New York time), the share price jumped sharply and exited the trading session with a gain of 4.2 percent. The closing price of 355.64 dollars meant a total value of 1.01 trillion.
The reason for the jump in the share price was that two U.S. competition lawsuits against Facebook were rejected on Monday. Gives investors confidence that Facebook won’t be broken up in the foreseeable future. Lowered risk apparently led to more buy orders for Facebook stock.
US states have watched too long
The lawsuit was filed by the U.S. Federal Trade Commission (FTC) on the one hand, and almost all U.S. states on the other. They accuse Facebook of unlawfully hindering competition for years. Facebook bought Instagram and WhatsApp because they threatened Facebook’s dominance. In addition, Facebook has abused its supremacy to restrict other online services.
However, in the view of the U.S. federal court, the states waited too long to file their lawsuit. Thus they had given up their right. The FTC’s complaint suffers from not explaining Facebook’s market share. The FTC may try to salvage its lawsuit with an improved statement of claim.
Twenty-fold increase theoretically possible
In May 2012, Facebook stomped the roughest Internet borstal to date. “With a valuation of $104 billion, or the equivalent of 80 billion euros, which some observers consider insane, Facebook is more expensive on the stock market right off the bat than the three long-established German flagship companies BMW, Deutsche Bank and Adidas combined”, reported the dpa then. At the start of trading of the Facebook share another ten billion were added.
But the share price soon collapsed. In early September 2012, the stock bottomed out at less than $18. Those who bought then had been theoretically able to sell at twenty times the price on Monday. But even from the price of the first Facebook trading day until Monday, the theoretical eightfold increase can be seen.
Apple ahead of Microsoft, SAP in 75th place
On Tuesday, Facebook’s stock lost one percent, bringing its borse valuation to 0.998 trillion. Long-term investors will get over it. Only Petro China (to go public on Shanghai’s bourse in November 2007), Apple (first in August 2018), Amazon (first in September 2018), Microsoft (first in June 2019), Saudi Aramco (since going public in December 2019), and Alphabet (in early 2020) had reached a trillion-dollar valuation so far.
Currently, Apple and Microsoft, two of the aforementioned companies, are worth more than two trillion dollars. Behind them, Saudi Aramco, Amazon, Alphabet, Facebook, Tencent, Tesla, Berkshire Hathaway and TSMC currently round out the top ten in the borse value ranking. The most highly valued company in Europe is LVMH (Moet Hennessy Louis Vuitton). It took 17th place on Tuesday with around $406 billion in sales. Germany’s top position is held by SAP ($143 billion, 75th place).