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Facebook Is Now Worth More Than Walmart

At least as far as its market cap.


FACEBOOK MARC ZUCKERBERG

After climbing 3% by the close of trading on Wall Street today, the total market value of Facebook broke $236 billion. That puts the company ahead of Wal-Mart for the first time. The retailer has only a $234 billion market valuation.

Facebook’s stock closed up $2.77, or 3.3%, at $87.51. Wal-Mart Stores Inc.’s stock dropped 30 cents to $72.49. Facebook also won out in total revenue for Q1 2015. It had total revenue of $3.54 billion against Wal-Mart’s $3.34 billion. But Facebook’s revenue grew 42% percent in the quarter, whereas Wal-Mart’s declined slightly.

Wal-Mart was founded in 1962 and first went public in 1970. Facebook was not founded until 2004 and went public only in 2012. So it took Facebook a little over 3 years to surpass one of America’s most iconic corporations.

The two companies are clearly going in opposite directions. Facebook’s stock has gone up 11% so far this year, raising its market value by $65 billion, while Wal-Mart’s has plummeted 15% since January, 2015. In fact, Wal-Mart has lost its place as one of the top ten most valuable companies in the S&P 500 index.

Just a year ago the two companies were separated in value by more than $100 billion in Wal-Mart’s favor.

Wal-Mart still has a more stable and traditional business model than Facebook.It sells inexpensive clothing and other items ranging from groceries to electronic devices. In a time of recession, Wal-Mart’s sales may actually go up as more people look for bargain prices. Since the American economy has picked up recently, this may have actually hurt Wal-Mart’s sales.

Facebook, on the other hand, depends almost entirely on ad revenue. If companies cut back on their ad budgets then Facebook’s revenues will plummet. Also, right now Facebook is the in thing. But the next big thing could be just around the corner and that might steal Facebook’s thunder.

So, don’t count Wal-Mart out just yet.

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