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IBM, Microsoft, Sun Microsystems, HP, & Apple. Bion Porzio Steve Lewis Erin Garcia May 16, 2007. Presentation Overview. Dot.com “bubble burst” of 2000 Company information How each IT company has fared since Question for the class. Dot.com Bubble. Economic bubble lasting from 1995-2001
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IBM, Microsoft, Sun Microsystems, HP, & Apple Bion Porzio Steve Lewis Erin Garcia May 16, 2007
Presentation Overview • Dot.com “bubble burst” of 2000 • Company information • How each IT company has fared since • Question for the class
Dot.com Bubble • Economic bubble lasting from 1995-2001 • Value increased in Internet and technology stocks • Rise of “dot.com” businesses • Stock prices, individual speculation, venture capital all increased • Companies focused on market share, investment and future promise; not profitability • “Bubble burst”- failure of dot.coms, recession
International Business Machines Corporation (IBM) • Founded: 1889 • Market Capital: $157.36 Billion • Share Price: $105.98 (May 11, 2007) • Last Annual Earnings: $11.9 Billion • Last Annual Revenues: $91.4 Billion • P/E: 16.92 • Main Products: hardware, software, consulting services, hosting services, infrastructure services • Employees: 355,766 • Since Bust: Not hurt, market leader in services because of previous reorganization
IBM 10 year stock price • http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=US%3AIBM
Apple Inc. • Founded: 1976 • Market Capital: $94.03 Billion • Share Price: $108.74 (May 11, 2007) • Last Annual Earnings: $2.4 Billion • Last Annual Revenues: $19.3 Billion • P/E: 34.41 • Main Products: Computer hardware, software, consumer electronics • Employees: 17,787 (full-time), 2,399 (temporary) • Since Bust: Ipod and Itunes saved company, stock soared, needs to continue to grow
Apple Inc 10 year stock price • http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=AAPL
Hewlett Packard (HP) • Founded: January 1st, 1939 • Market Capital: $121.08 Billion • Share Price: $45.24(May 12, 2007) • Last Annual Earnings: $6.5 Billion • Last Annual Revenues: $91.7 Billion • P/E: 19.4 • Main Products: personal computing and other access devices, imaging and printing-related products and services, enterprise information technology infrastructure and multi-vendor customer services • Employees: over 140,000 people in 178 countries • Since Bust: PC segment is booming (pushed Dell out as #1 PC maker), Different from competitors in terms of what they offer.
HP 10 year stock price • http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=HPQ&CP=0&PT=10
Microsoft • Founded: 1975 • Market capital: $296 billion • Share price: $30.95 • Last annual earnings: $12.6 billion • Last annual revenue: $44.28 billion • P/E: 22.32 • Main Products: Microsoft Windows operating system, Microsoft Office suite, Microsoft Servers, Xbox. • Employees: 71,172 • Since Burst: Grew dramatically in 1990’s. Presence around the world allowed them to recover nicely from the burst. In 2001 released Windows XP which helped in transition to overcoming the bust and into the millennium.
Microsoft 10 year stock price • http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=MSFT
Sun Microsystems • Founded: 1982 • Market capital: $18.2 billion • Share Price: $5.11 • Last annual earnings: -$157 million • Last annual revenue: $13.87 billion • P/E: NA • Main Products: UNIX Computer servers, workstations, storage, Java-based software and services. • Employees: 38,600 • Since Burst: Pre-burst: Dramatic growth in all areas. 2001 burst hit them hard. Relied heavily on hardware sales. Repeated layoffs and consolidation of manufacturing operations. Linux servers gained popularity because of the substantially lower expenses due to the open-source software and helped in recovery.
Sun Microsystems 10 year stock price • http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=US%3ASUNW
Future Implications • Dotcom Bubble burst (2001) • Resulted from public bubble funded by Wall Street. • Immense initial public offerings created a gullible public whose money propped up companies that should have never been in business. • Web 2.0 Explosion • Resulting from a private bubble financed by venture capital. • Venture capital investments are small in comparison. • Current business model is “build to flip” – start a small company and sell it to the highest bidder.
Questions • Now that you have a better understanding of these particular companies: • which company listed above would youinvest in for the next ten years if you had $100,000 and left it in onecompany for a decade without taking it out? Why?