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How great wealth is being created...
July 17th, 2020
⏰ 1 minute read
⏰ 1 minute read
AAPL, AMZN, MSFT raised $7.1bn. Now they’re worth an average $1,900bn. One Indonesian company raised $6bn.... now it’s worth less than $1bn.
Sharpfokus Saham Data
f you’re one of our Sharpfokus Saham subscribers you know we have a lot of data. We cover 107 companies including 11 listed in the US. From all the data we can see many fascinating investment stories. Here’s one about how the 3 largest US companies used capital to create great wealth & 1 of the Indonesian ones.. did not.
Capital
We know that if you want to create great wealth, you need capital. Capital is not only money, it’s an idea & the commitment & effort to bring that idea to life. You also need money in the form of debt & equity capital. Presumably as & they’re much bigger the US companies raised more capital than the Indonesian one, right?
$6bn
Well, very surprisingly, no they didn’t. The 3 largest US companies AAPL, AMZN & MSFT raised on average just $7.1bn of capital each at their peak, before then paying capital back out to the investors in the form of dividends & share buybacks. The Indonesian company which we shall not name, raised more than they did, $6bn at the peak.
Cashflow is key
If you’re a subscriber with access to all the data, you might be saying hang on! Because you know AAPL has over $100bn of debt. How can we say it raised less than $10bn of capital? The reason is the 3 US companies raised most of their capital after making huge cashflow & were paying out more capital than they raised.
Creating wealth
The US companies used capital to fuel their cashflow growth, the Indonesian one used capital to build assets with no cashflow. Today the Indonesian company is worth less than 10% of the value of those assets, while the US companies are worth 5-10x their much larger assets. The Indonesian stock is <$1bn, the 3 US companies a combined $5.5tn.
f you’re one of our Sharpfokus Saham subscribers you know we have a lot of data. We cover 107 companies including 11 listed in the US. From all the data we can see many fascinating investment stories. Here’s one about how the 3 largest US companies used capital to create great wealth & 1 of the Indonesian ones.. did not.
Capital
We know that if you want to create great wealth, you need capital. Capital is not only money, it’s an idea & the commitment & effort to bring that idea to life. You also need money in the form of debt & equity capital. Presumably as & they’re much bigger the US companies raised more capital than the Indonesian one, right?
$6bn
Well, very surprisingly, no they didn’t. The 3 largest US companies AAPL, AMZN & MSFT raised on average just $7.1bn of capital each at their peak, before then paying capital back out to the investors in the form of dividends & share buybacks. The Indonesian company which we shall not name, raised more than they did, $6bn at the peak.
Cashflow is key
If you’re a subscriber with access to all the data, you might be saying hang on! Because you know AAPL has over $100bn of debt. How can we say it raised less than $10bn of capital? The reason is the 3 US companies raised most of their capital after making huge cashflow & were paying out more capital than they raised.
Creating wealth
The US companies used capital to fuel their cashflow growth, the Indonesian one used capital to build assets with no cashflow. Today the Indonesian company is worth less than 10% of the value of those assets, while the US companies are worth 5-10x their much larger assets. The Indonesian stock is <$1bn, the 3 US companies a combined $5.5tn.
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