From Louise Kehoe's front-page story on how Microsoft (affectionately known as Mr Softee, after its ticker symbol, MSFT) was the first company to hit a market capitalization of $500 billion
"At yesterday's closing price Microsoft was valued at more than 30 times the company's sales over the past year, compared with just 3.5 times for General Electric, the second most valuable company with a market capitalisation of about $390bn."
And from the paper's anonymous Lex column, an item on rumors that MSFT will create a "tracking stock" for its Internet interests (tracking stocks are especially ficitious forms of fictitious capital: they represent only a segment of a larger business, and have no voting rights):
"Disney is not the first to try this sleight of hand and will not be the last. Even mighty Microsoft is said to be mooting the creation of a tracking stock for its MSN web interests. The purpose is to fund internet acquisitions. Microsoft and Disney share a concern. They want to expand their web businesses, but their stock is not sufficiently highly rated to be viable as currency. Microsoft may trade on more than 20 times 2000 revenues, but internet stocks average over 50."
Microsoft, at a valuation nearly nine times that GE (relative to sales), is still "not sufficiently highly rated"! Meanwhile, Gates's Microsoft stock is a point shy of being worth $100 billion, though his other assets put him over the top. Poor Gates: though he's the richest guy in the world, his wealth equals only about 1% of U.S. GDP. John D. Rockefeller peaked at $1 billion in 1911, or almost 3% of GDP. If the bull market goes on another 5 years, maybe Gates will eclipse him!
Doug