“News Corporation, which the Murdoch family controls and is our biggest listed company, is moving its principal place of residence from Australia to the US,”
— Grahame Morris, this morning’s Oz Media section
“Mansfield has been chairman since November 1999 of Australia’s biggest company.”
— Stephen Long, this morning’s AM program
Yesterday we published this league ladder of market values:
BHP-Billiton: $76 billion
News Corp: $70.5 billion
Telstra: $56 billion
NAB: $47 billion
Commonwealth Bank: $40 billion
As you can see, Long and Morris are both wrong. After trading began this morning, it has changed slightly but the order remains the same and Telstra is still $18.5 billion smaller than BHP-Billiton so we don’t know what Stephen Long was talking about.
At least Long had the excuse of doing a live interview, Grahame Morris had two weeks between columns and still got it wrong about one of his former employers and current clients.
The Age also stuffed up this morning carrying a Bloomberg piece with the following line: “News Corp is the latest well-known company leaving Australia in search of more lucrative stockmarkets. BHP-Billiton, Rio Tinto and Brambles are doing it too.”
The BHP-Billiton head office remains in Melbourne. Has it escaped The Age’s attention that the Grollos have built the mining giant a $100 million-plus new head office on the same Lonsdale Street in Melbourne which houses the paper.
CEO Chip Goodyear and chairman Don Argus both live and work in Melbourne so can we all please stop ignoring BHP-Billiton as if it is a foreign company. The silly old ASX refuses to include the old Billiton shares in the index so this is why News Corp appears to be larger in the market cap league ladders that get published each week in the broadsheets.
From the second April 15 sealed section
The Prime Minister obviously doesn’t read Crikey as he too has blundered in suggesting that Telstra is our biggest company when it is only third. This is from today’s ATSIC press conference:
PRIME MINISTER: Nothing in this world surprises me. I’m, you know, used to most things and let me say this that, the fact that I have now had three questions on Telstra, you know what it underlines? The continuing absurdity of the Government owning just over 50 per cent. I mean, this is the largest corporation in Australiaand it should be managed and dealt with and viewed like any other major corporation. But while ever the Government remains not only the major shareholder, but the majority shareholder, you will have this neither fish nor fowl situation, which is not in the long term interest of the shareholders and not in the long term interest of delivery of communication facilities for this country.
Crikey has been amazed at the range of people making contact contesting our point that Telstra is not the largest Australian company. Take this as an example from a News Ltd heavyweight who claims to know something about business reporting: “What are you talking about? Telstra is EASILY our biggest company. Are you taking into account the 51% the government owns?”
Then we had this from someone who works for Morgan Stanley: “The figures you quote are the listed market capitalisations of the selected companies. But remember that Telstra is 50.1% owned by the federal government, so its actual value is about double its listed market cap – or $112 billion – thereby making it Australia’s largest company.”
We also had the PM himself saying the following yesterday: “The continuing absurdity of the Government owning just over 50 per cent. I mean, this is the largest corporation in Australiaand it should be managed and dealt with and viewed like any other major corporation.”
Okay, let’s spell out all the facts to prove the PM and everyone else is plain wrong.
Telstra had 12.8666 billion shares on issue up until last November’s buyback of 238.24 million shares for $1 billion which reduced the total to 12.628 billion. Telstra shares are down 2c at $4.69 today so this capitalises the whole of Telstra at $59.22 billion.
Since T2 in 1999, the government has owned 6.4462 billion Telstra shares which is now 51.05 per cent (not the 50.1 per cent which many outlets continue to erroneously report) of the total. The government’s stake is worth $30.23 billion and the publically listed portion (now down to 6.1818 billion shares) is worth $28.99 billion.
The cretins at the ASX and broadsheet newspapers like The Australian, The Age and the SMH, continue to publish league ladders which for some reason exclude the government’s shares as if they don’t exist. Even when including the government’s stake, Telstra is clearly smaller than both News Corp and BHP-Billiton in terms of market value.
News Corp has 2.096 billion ordinary shares on issue. The stock is trading at $12.36 today so this values the ordinaries at $25.9 billion. After the Hughes Electronics acquisition, News Corp has an expanded 3.855 billion preferred shares on issue which are worth $44.14 billion based on today’s price of $11.45.
This gives it a total market capitalisation of $70.04 billion which is $10.82 billion more than Telstra’s $59.22 billion.
BHP-Billiton is a dual-listed company. It has 3.75 billion shares on the Australian market and 2.467 billion UK shares, making a total of 6.217 billion. The shares are identical so with the stock trading at $12.09 today, it is valued at $75.163 billion, making it the most valuable company trading on the Australian market.
For some reason, the ASX pretends the $29.826 billion worth of UK shares (the old Billiton stock) doesn’t exist and they and the broadsheets only include the $45.337 billion worth of Australian shares.
When measuring the total value of a company, you must include all shares on issue. You shouldn’t exclude the government’s Telstra shares, BHP’s UK-listed shares or Rupert’s non-voting shares.
When including every share on issue, the league ladder is as follows today:
BHP-Billiton: $75.163 billion
News Corp: $70.04 billion
Telstra: $59.22 billion
We could try having an argument using other measures such as revenue, employees, assets, enterprise value and profit but on most measures Telstra is still not the biggest at the moment, although it certainly has been in the past.
Since BHP surrendered its number one ranking about eight years ago, Telstra, NAB and News Corp have all enjoyed stints at the top. Crikey is going to take a golf and tennis rankings approach and try to identify the periods of time each has had at the top over that period. Can anyone help with the number crunching? All contributions to [email protected].
Now, all you cretins out there please repeat 10 times: Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company. Telstra is only our 3rd biggest company.