What Was the Biggest Company in History? - $7.9 Trillion! - YouTube

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Hi welcome to another ColdFusion video

Since 2013, this channel has featured the "How BIG" series

Essentially, the series explores the size and scope of different companies

Recently, Apple has passed the one trillion dollar valuation mark, but since "How BIG is Apple?" video already exists

I have the idea to take things a little further. I ask myself the question "What was the biggest company of all time?"

In this video, we'll quickly touch on the 8 most valuable companies in history and then spend some time on number one because it's a fascinating story.

This company was so large that they literally geographically shaped the world we know today.

Alright, let's get into it

At number 8, we have Microsoft in 1999. The company was valued at $0.9 trillion at the height of the dot-com bubble

Number 7 is Apple in 2018. This is due to the persistent popularity of the iPhone which makes up about 70% of the company's profits

Though some do speculate that this

Trillion-dollar stock figure is more complicated due to low interest rates making it viable for the companies to buy back

Its own stock, pushing up the stock price further

At number 6, we have Standard Oil. In 1900 this company was worth $1 trillion.

Standard Oil was soon broken up by the American government into well, pretty much every major American oil company

At number 5, we have PetroChina.

In 2007 they were valued at $1.4 trillion and this was right at the peak of oil prices just before the GFC

The 4th most valuable company of all time is Saudi Aramco, valued at $4.1 trillion at its peak in 2010

From here on we have to step back in time, hundreds of years to reach the real heavyweights

At number 3 and 2 respectively, are the South Sea company

worth $4.3 trillion and the Mississippi company worth $6.5 trillion both in 1720.

Of course, these numbers are adjusted for inflation

The reason for these astronomical valuations is quite interesting

In 1720, a bubble formed around

speculation of trade between North and South America

The two companies mentioned promised that they could capitalize on trade between the American continents and their stock rose accordingly

The speculators in these companies would coined the term 'millionaire'

In reality, mass trade between the Americas didn't really end up happening and the bubble soon popped

Okay, so on to number one

Valued at a ridiculous $7.9 trillion in 1637 is the Dutch East India Company

The story of the Dutch East India Company is absolutely fascinating

The story starts in the Netherlands in a time called the golden century, a period of Dutch history between

1600 and 1700 where Amsterdam was one of the richest cities in the world, due to its strong international trade

Trade was essentially how all countries made their money

In 1600, the Dutch government was worried about England becoming dominant in trade

To combat this threat, they sponsored the creation of the Dutch East India Company in 1602 and allowed the firm to become a monopoly in Asian trade

The company quickly became one of the dominant players in the trade of spices between Europe and Indonesia

Spices might not seem like much today, but back then spices were scarce and extremely valuable

They were used in medicine, to preserve cooked food, and to add flavour to meat

Spices actually improved the quality of life

Dutch East India Company is one of the most important companies in history and one of the reasons for this is that

it was the very first company to go public on the world's first Stock Exchange

From here, it continued to grow until it had 70,000 employees at its peak

In the 1600s, that was more than 0.01% of the world's population working for this one company

The firm ran their own shipyards, built a network of hundreds of bases, and had anything from officers to warehouse and heavy work stations

In order to keep their ports and continue trade, Dutch East India Company

developed their own army to protect the land that they gained and this is where things start getting beyond any company that we can imagine today

As the company grew, the foreign colonies gained more land and possessed a sense of governmental powers

The Dutch East India Company had the power to wage war, negotiate treaties,

mint its own coins, and even established new colonies. The company was even used to fight against the Spanish Empire in the early 1600s

and remember, this was a publicly traded company doing all of this

It doesn't stop there though

there were also expansive sailing expeditions that resulted in the discovery of new land

as it turns out the Dutch East India Company actually helps shaped the geographical knowledge of the modern world

They would stay operational for two centuries, and had effectively transformed itself from a corporate entity into a state, and then an empire

Ok, so now we know that the company started by trading spice and ended up a tyrannical Empire

But what was its most profitable business? The answer isn't one you would expect

The peak of their wealth came from flowers

Tulips to be exact, and the story of how this happened has gone down in infamy

It tells us a deep archetype story. Although technologies in the world may advance, human nature remains the same

Tulips were first introduced to Europe from Turkey and reached Amsterdam in 1554

The plants are immediately perceived as exotic goods, and their popularity began to rise

Having tulips in your garden became an important status symbol

In addition to this, the thing about tulips is they take seven to twelve months to flower and only bloom for about a week

This rareness and the fact that there are status symbol and highly valued, made the tulip product a prime candidate for the first

financial bubble in history

The tulip bubble

You see at the time, the Dutch were pioneers of modern finance

They devised a way to set up a market where you could trade tulips all year round even if they weren't in bloom

The prices were set by traders that signed to a contract based on future prices

This was the very first futures derivative market. The same kind that we used to trade stocks with today

Over time, the tulip market became more complicated and flowers were priced according to their rarity

As with all derivative markets, things tend to go out of control sometimes

The prices of the tulips are pushed higher and higher by speculators who plan to turn around and sell them for a profit

This is the very same thing that happens in all modern financial bubbles from people flipping houses

expecting the next guy to pay for it, to stock and bond traders doing the same thing. As I said, human nature stays the same

Many merchants sold all of their belongings to purchase a few tulip bulbs for the purpose of selling them at a higher profit

than they could ever imagine in their lifetimes.

This was the 1630s and the average person could expect to live fewer than 40 years and be lucky to make any money at all

Meanwhile, some of the tulip traders were earning the equivalence of sixty two thousand dollars a month

But it seemed like the tulips for a quick way to paradise and everyone wanted in

During the build-up and height of Tulipmania, the Dutch East India Company

incorporated the tulip trade into their operations and the stock price began to rocket upwards

By this stage, even England and France are trading tulips on the London Stock Exchange

The acceleration of price continued and soon does a price explosion of twenty fold just in a single month

To give you an idea, at the peak a single tulip bulb was worth ten times more than a craftsman's annual wage

By this point, the Dutch East India's value had risen to that infamous massive $7.9 trillion mark

To highlight how huge this was just one more time, if you put Apple, Microsoft and Google together,

Dutch East India Company was worth three times that combined value

So you might be wondering, what happened next?

Like all bubbles, the tulip bubble popped in late 1636

So what caused the crash? It turns out that some of the buyers in North Holland refused to show up to routine tulip bulb auctions

It signaled to the market that people just weren't going to pay any higher for the plant

This event caused the tulip price to fall a little

Investors then got cold feet and decided to sell. So the price fell more

More people saw the price falling and decided to sell as well, and the cycle continued. Soon the market violently imploded

Within just a few weeks,

Tulip bulbs were only worth a hundredth of their former price

This resulted in a full-blown panic throughout Holland and an economic crash that lasted years

The Dutch government would later make changes to the financial system to make sure that this never happened again

So what about the Dutch East India Company? What happened to them?

Well, the company stayed very powerful until the mid 1700s

but after bad management, and a war between the English and the Dutch,

the company was dissolved and overtaken by the government in 1799, and the colonies of the company became Dutch colonies

So, what does this tell us?

The tulip bubble speaks of human nature and greed. Like many things in life,

it's important to look at the underlying value of something and not just what everyone else thinks it's worth

The Dutch East India Company size is completely unparalleled today. There were a complete government within themselves

On one hand, I guess it warns about the close ties between industry and government. But on the other hand,

they did discover new lands, shaping modern geography, and also with a pioneering company to trade on the stock market forever shaping finance

But all in all, I just thought that was an absolutely fascinating story and I wanted to share that with you

So anyway, that is the end of the video. Thanks for watching

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Anyway, that's it and I'll catch you again soon for the next video. Cheers guys!

Have a good one