by Michael Kraten, PhD, CPA
Although all Americans celebrate Independence Day on July 4, those who own Apple stock may be rejoicing more than others this year. On the final trading day before the holiday weekend, Apple became the first publicly traded company to achieve a $3 trillion market value.
According to the global marketing consultancy Interbrand, a large chunk of that value can be attributed to its name alone. In 2022, the most recent year available, Interbrand estimated Apple’s brand value to be worth $482 billion. At the time, it was growing 18% annually; thus, Apple’s brand is almost certainly worth more than a half trillion dollars today.
Furthermore, just as Apple’s overall market value is the largest of all firms, its brand value is likewise larger than that of all other companies. Interbrand estimated that the second most valuable brand in 2022 belonged to Microsoft. Its $278 billion brand value, though, trailed Apple’s $482 billion by a sizable amount.
At the opposite end of the corporate valuation spectrum, Overstock.com recently decided to bet its existence on the value of a name. Two weeks ago, the home goods bargain discounter purchased the brand and other intangible assets of the liquidating retail chain Bed Bath & Beyond. Overstock’s CEO Jonathan Johnson explained:
Overstock.com will now completely rebrand itself Bed Bath & Beyond. It’s gambling that the value of a bankrupt retailer’s name will carry it to future success.
Although Apple’s sizable brand value is less than half of its total market value, BB&B’s brand might be worth more than the remaining assets and operations of the bankrupt retailer combined. Despite the disparity in their relative valuations, though, the two companies clearly shared an ability to create value by developing loyal customer relationships.
Originally published at michaelkraten.blogspot.com. All rights reserved by author.