The big market news today is about Apple’s gargantuan market capitalization reaching a new, stunning high:
Apple Becomes Biggest Company in History, Passing Microsoft in 1999
Apple is now the most valuable company of all time
The Wall Street Journal’s lede:
Apple is now the most valuable company of all time.
Apple sets record for most valuable company
Insanely Huge: Apple Becomes the Most Valuable Public Company Ever
The Associated Press’s lede:
Apple is the world’s most valuable company, ever.
Apple becomes most valuable company of all time
You get the picture. There’s a big problem with all of these headlines and ledes: They’re all false.
Apple is not the biggest or most valuable company in history—not by a longshot. That’s because the press is overlooking reality for the apparently irresistible pull of a headline that includes “Apple” and “record”—pageview gold.
Apple’s $622 billion market cap is a nominal record, which means “in name only,” or alternatively, not really. That’s because it’s a record only if you don’t adjust Microsoft’s 1999 market cap for inflation (ADDING:
Microsoft doesn’t even hold the record, apparently. IBM in 1967 was worth at least $1.3 trillion in today’s money. I’ve updated my subhead to correct that MSFT’s isn’t a record. See my embarrassing correction below). Sorry, but you have to adjust any number like this that’s that old for inflation—it’s comparing apples to oranges not to do so.
It takes $1.38 in today’s dollars to equal the same value as one 1999 dollar. That means Microsoft’s peak market cap in 1999 was actually about $856 billion in constant dollars, $235 billion more than Apple’s current market cap.
Of these pieces, AllThingsD, the WSJ, Reuters, and Bloomberg don’t mention anywhere in their posts that Apple’s is a nominal record and that Microsoft’s inflation-adjusted record still stands.
The others at least nod to the truth (though I’m not sure if this is better or worse, since it shows they at least thought about the value of money), but typically bury it several paragraphs down and with wiggly language that shows them trying to justify their misleading thesis. For instance, USA Today in its sixth graph:
Some might even argue that Apple has a ways to go until it beats all the records. Microsoft’s 1999 high of $620.6 billion nearly 13 years ago would actually be worth $850 billion in inflation-adjusted dollars.
How can you know this and still write a lede that says, “Apple is now the most valuable company the world has ever seen”?
This is one of those unfortunate instances when the press desire for truth bumps into its need for news—and “records” make for better news than non-records.
* CORRECTION: Let me rap myself on the knuckles here for the above update, which was flat incorrect. As commenter JD points out, IBM’s 1967 market cap was not $1.3 trillion in real dollars, it was $192.3 billion. The NYT’s data was already adjusted for inflation.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum. Tags: Apple, headlines, inflation, numeracy, stock market