Nah, I'm sorry, using those numbers in this manner is barely meaningful.
If I buy a Chicago mac&cheese stand for ten dollar, swap the cheese for provolone, and sell the stand for a thousand dollars a month later, I have increased its value by 100 x 12 = 1200 times per annum.
If I buy IBM for $100 billion, and manage to return it from $5 loss to $15 profit per year, selling it ten years later for $200 billion, I'll have doubled its worth in ten years,
By using the numbers in your fashion, in my example, the street stand vendor would be a twelve thousand times better businessperson than the CEO who oversaw one of the great turnarounds of modern US industrial behemoths. Using the numbers of market capitalization growth in this sense is meaningless.
Using real numbers is meaningless, but comparing TWDC to a Chicago mac&cheese stand (not that I have seen one, hot dog or pizza stand might have been better) is?
The point my friend was making in the note was that Disney was a tiny corporation with a very tired BRAND that was about to be sold off piece by piece when Michael and Frank took over in 1984. They took a TINY company and made it a worldwide media powerhouse, and during Michael Eisner's tenure the market cap exploded by 30 fold.
That is anything but meaningless (although, yes, I would agree that your example is nonsensical and, therefore, meaningless).
To use the analogy of swapping out cheese to the spectacular achievements TWDC made during ME's tenure shows a profound lack of understanding.
But let me point out, and it's possible others already have as I read this thread in order and am on page 313, the 2005 valuation of the WDC could be viewed as unfair to Michael Eisner as it had been depressed by a recession, the worst domestic terror attack in US history, multiple wars and a general collapse in the tourism sector.
Pre 9/11, what was the market valuation of TWDC? I can tell you the $59 billion 2005 number suffered from Wall Street discounting the stock, largely (but not totally) over MAJOR concerns in the P&R division.
But back to your original point,
@Empress Lily, if the market cap of TWDC (or any company) as cited in the note to me is a bogus metric, do tell me if I were to buy TWDC today, what price would I have to pay for it and what would that number be based on?
Thanks.
Should one wish to do so regardless, here are more meaningful, because comparable, data sets. The two most recent decades, the first under Eisner (1995-2004), the second under Iger (2005-2014):
DIS Market Cap 1995: $54.26 billion
DIS Market Cap 2004: $49.35 billion
DS Market Cap 2014: $138.4 billion
Ouch!
Eisner sans Wells lost five billion. Iger exploded market cap.
My, my, at least we know you are creative. Perhaps, even a creative enough acountaneer to work for Disney. Tell me, Lilly, you just stated that Iger ''exploded market cap'' but in reality he did little more than double it during his tenure. If you were investing your money in a company, would you want the executive who took each of your dollars and made you 30 more? Or, would you want the one who took your dollar and handed you back two and change?
... Playing with numbers can be fun. Just the facts.
