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Why No One Knows What Apple Is Worth

Apple may cross the $1 trillion valuation mark today, giving everyone with an even passing interest in corporate finance something to obsess over.

When and if Apple will cross the milestone today is up for debate. Not everyone agrees on what the consumer electronics giant is worth, sowing confusion on Twitter and other places where finance fans congregate online.

Data providers can’t agree. Apple’s own Stocks app has listed Apple’s market cap as $1 trillion or better. As does Yahoo Finance. But Google Finance, MarketWatch, and other providers have smaller figures listed.

What gives? At issue is Apple’s exact share count. If you know precisely how many Apple shares exist, you can quickly divide that number by $1 trillion, and, voila, you’ll arrive at a per-share price at which Apple would be worth the full trillion. At least in theory.

Per Apple’s most recent 10-Q, the firm has “4,829,926,000 shares of common stock […] issued and outstanding.” One trillion dollars divided by that figure works out to $207.04. So, if Apple reaches that threshold, it’s likely worth $1 trillion.

But that may only be directionally correct. As Apple’s 10-Q also notes, the share count we just used is only good as of July 20th. That’s nearly two weeks ago. Apple could have raised its number of shares since then by issuing equity through an employee compensation program (meaning that a lower per-share price is needed to reach $1 trillion in market cap) or reduced its share count through a repurchase program (increasing the needed per-share price to reach $1 trillion).

If Apple reaches $207.04 per share, it’s probably worth $1 trillion. But it may reach that figure either before, or after, depending on its current, correct share count.

Happy Apple Mystery Market Cap day!

Illustration Credit: Li Anne Dias

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