Amazon’s phenomenal rise in market value
The most remarkable case of wealth creation, business success in history?
The video above (click arrow to start) shows graphically the phenomenal rise in the stock market valuation of online retailer Amazon compared to the market capitalization of one of its main retail competitors – the brick-and-mortar retail giant Walmart (special thanks to AEI’s Olivier Ballou for graphical assistance and Scott Grannis for providing the data) . Here’s some history:
- Amazon stock was first offered for sale to the public on May 15, 1997 through an Initial Public Offering (IPO) at $18 per share, and that put Amazon’s initial market cap at about $438 million. At that time, the market value of Walmart’s stock was $68.3 billion, or 156 times greater than the value of Amazon.
- Over the next several years following Amazon’s IPO, Walmart’s value rose from less than $70 billion to more than $200 billion in March 1999 before topping $300 billion briefly at the end of that year. Since then the retail giant’s market cap has remained flat at around $225 billion for almost the last two decades (see video above) and is currently $239 billion based on Walmart’s closing price yesterday of $77.54 per share.
- After Amazon’s IPO in 1997, it took 14 years before the market valuation of its stock exceeded $100 billion in July of 2011, and another four years to surpass $200 billion in June of 2015. Then it took only five months to top $300 billion in market value in November 2015, and another 15 months to exceed $400 billion for the first time in February of this year. As of yesterday, Amazon’s market value was $462 billion.
- The video helps to tell the amazing story of Amazon’s value as a company – it took slightly more than 18 years from Amazon’s IPO in May 1997 until its market capitalization matched Walmart’s in July of 2015 at about $231 billion. Then it took less than two years for Amazon’s market cap to double and grow to twice the size of Walmart’s market cap: $457 billion for Amazon vs. $228 billion for Walmart when the video was produced and finalized yesterday.
Bottom Line: Amazon’s increase in market value from less than $500 million in 1997 to more than $450 billion today might be the most remarkable example of wealth creation and business success that has ever taken place in the history of the world, at least over such a short period of time. As the Wall Street Journal’s editorial board pointed out today:
……
Amazon’s official corporate version of consumer sovereignty is known as The Amazon Doctrine, as Amazon CEO Jeff Bezos explained in 2012 when he unveiled the new Kindle Fire HD tablets:
Above all else, align with customers.
Win when they win.
Win only when they win.
Πηγή: American Enterprise Institute
