Which companies have held the record for highest market capitalisation?

Sep 30, 2019 | 3 weeks ago | Read Time: 5 minutes | By iKnowledge Team
Source: Trade India[1]

For an investor, market cap gives the starting point for evaluation. Market cap can also be thought of as a reference point; it would give us an indication if it is a safe investment to buy shares in a particular company by looking at its market cap and its market value.

Companies with the highest market cap in history

Source: The Motley Fool[2]

In the 1990s, we witnessed the dotcom bubble, and in the mid – 2000s, it was the housing prices that seemed to provide the best investment opportunities. However, it wasn’t the first time we witnessed asset bubbles in history. In fact, once we adjust for inflation, we can compare the market cap of companies in the past, to those of today.

Dutch East India Company (VOC)

Source: Pinterest[3]

The Dutch East India Company, also known as Verenigde Oost-Indische Compagnie, which was established in 1602, was granted monopoly on trade. The 21 – year monopoly was given by the Dutch government for the spice trade in Asia.

During what is considered to be the world’s first financial bubble, in 1637, the Tulip Mania saw The Dutch East India Company being valued at 78 million Dutch guilders at the time. By adjusting for inflation, that corresponds to a staggering $7.9 trillion today! [4] In fact, the valuation is more than the GDPs of Japan and Germany put together.

Mississippi Company

Source: The Bubble Bubble[5]

Like the Dutch East India Company, the Mississippi Company held a monopoly backed by the government in French Louisiana. The Mississippi Company saw the Mississippi bubble, which started when the wealth of Louisiana was exaggerated in a marketing scheme, so as to lure people to invest in the company, and buy its shares. This resulted in a dearth for paper bank notes, and at its peak, the Mississippi Company was valued at $6.5 trillion (after adjusting for inflation).

However, the bubble burst by the end of 1720, leading to France absorbing Mississippi Company and its debts. The country then raised the taxes to offset the losses incurred.

South Sea Company

The story of the South Sea Company was similar to that of the Mississippi Company. The SSC was given monopoly by the British government to trade with South America, and during its bubble, the stock in the company was worth 80 times more than the cost of gold and silver in France.

However, around the time the Mississippi Company folded, the South Sea Company bubble crashed, but the British government intervened to ensure that the entire banking industry wouldn’t collapse. Adjusted for inflation, the SSC at its peak was valued at $4.3 trillion.

Source: Zee Business[6]

Saudi ARAMCO

The Saudi Arabian national petroleum and natural gas company was called the most profitable company in the world by Bloomberg News, and in 2005, Saudi ARAMCO became the largest company in the world, with a market value of $781 billion.

At various times, numerous analysts estimated Saudi ARAMCO’s value, with Financial Times once believing that the petroleum and natural gas company valued at $10 trillion, making it the most valuable company in the world. However, in early 2018, it was estimated that the true value of the company is around $1.2 trillion[7].

Source: Money Morning[8]

PetroChina

China’s second biggest oil producer, PetroChina Company Limited is a Chinese oil and gas company. In 2007, PetroChina announced that they had discovered China’s largest oil reserve just off the northeast coast, and while those claims turned out to be untrue, PetroChina surpassed the market cap of $1 trillion after debuting on the Shanghai Stock Exchange, becoming one of the most valuable companies on the planet.

Adjusted for inflation, PetroChina’s market capitalization would be around $1.4 trillion today.

Source: CNBC[9]

Companies with the highest market cap today

Amazon recently passed Alphabet to become the second most valuable company in the world, just behind Apple. Apple Inc. became the first entity to reach the $1 trillion market valuation earlier this month, and is now followed by Amazon, Alphabet, Microsoft and Facebook[10].

Source: Wall Street Journal[11]
Source: Wikipedia[12]

Companies with the highest market cap in India

For an investor looking for investment opportunities, understanding market cap is of utmost importance. For those wondering where to invest, the top five companies with the highest market cap in India would provide them with the best possible options.

Source: Money Control[13]

The top five companies with the highest market cap in India are TCS, Reliance, HDFC Bank, HUL and ITC.

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Citations:

[1] http://tradeinfoindia.blogspot.com/2013/06/market-capitalization.html

[2] https://www.fool.com/investing/general/2012/08/22/a-history-of-ridiculously-big-companies.aspx

[3] https://www.pinterest.co.uk/pin/407927678734190587/?lp=true

[4] https://www.fool.com/investing/general/2012/08/22/a-history-of-ridiculously-big-companies.aspx

[5] http://www.thebubblebubble.com/mississippi-bubble/

[6] http://www.zeebiz.com/world/news-will-bitcoin-be-another-bubble-tale-33404

[7] https://www.bloomberg.com/gadfly/articles/2018-04-13/saudi-aramco-may-have-to-settle-for-just-a-trillion-or-so

[8] https://moneymorning.com/2016/01/08/start-preparing-for-a-saudi-aramco-ipo-in-2016/

[9] https://www.cnbc.com/2018/08/02/petrochina-did-not-fare-well-after-reaching-1-trillion-in-market-cap.html

[10] https://www.cnbc.com/2018/03/20/amazon-just-passed-alphabet-to-become-the-worlds-second-most-valuable-company.html

[11] https://blogs.wsj.com/moneybeat/2018/03/20/amazon-poised-to-pass-alphabet-as-second-largest-u-s-company/

[12] https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization#2018

[13] https://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/index.html


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