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Tech companies Amazon and Facebook both surpassed Exxon Mobil to become the world’s fourth- and fifth-most valuable firm based on market capitalization at the close of trading on Monday.
As reported in Business Insider, shares for the U.S. oil giant fell by 3.47 percent and this pulled the company’s value down to US$351 billion. Conversely, Amazon’s value rose to US$366 billion after its stock price grew by 1 percent. Facebook jumped into fifth place with a value of US$354 billion.
The value of the burgeoning e-commerce firm has skyrocketed from seventh place after revealing its fifth consecutive quarter of profits last Thursday. Facebook’s revenue, meanwhile, grew by 59 percent. Thus, the top five largest firms all belong in the technology sector, with Apple leading the way at a value of nearly US$566 billion and followed by Alphabet Inc. (Google) and Microsoft.
Exxon has struggled amid dropping prices of oil and natural gas over the last few year; thus, revenue dropped from at least US$411 billion in 2014 to US$269 billion the subsequent year. The company’s fortunes haven’t improved in 2016, and last week reported a whopping 59 percent profit loss in the second quarter of this year. This led Exxon stocks to dip by 3 percent last Friday alone, per CNNMoney.
In April, the company was stripped of its top Standard & Poor’s credit rating of AAA for the first time since 1930. According to The Huffington Post, the credit agency claimed Exxon “took on debt so it spent billions investing in new projects and using dividends and stock buybacks to send money to shareholders when the price of oil was high”.
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, explained to The Wall Street Journal that Exxon could end the year outside of the top five largest U.S.-listed companies for the first time since at least 1980. Since then, Exxon has finished the year as the largest company on nine occasions, one off the mark set by General Electric.
By Erwin Cifuentes for Oilprice.com
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Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.…