Netflix 'Billions' Analysis of characters through CFA Code and Standards

Netflix ‘Billions’ Analysis of characters through CFA Code of Ethics and Standards of Professional Conduct

William LONGIN

In this article, William LONGIN (EDHEC Business School, Global BBA 2020-2024) analyzes the show “Billions” through the lens of the Code of Ethics and Standards of Professional Conduct developed by the CFA Institute. I wrote this post while I prepared for the Level 1 of the CFA exam.

Overview of ‘Billions’ and ethics

The Netflix show “Billions,” set in New York City, portrays the intense story between three individuals: Bobby Axelrod, CEO of hedge fund ‘Axe Capital’, Chuck Rhoades, a tenacious US Attorney, and Wendy Rhoades, the wife of Chuck Rhoades and a talented performance coach working at Axe Capital. Bobby Axelrod and Chuck Rhoades fight for their honor and survival throughout the series with sometimes questionnable actions. Wendy Rhoades often plays the role of a middle person to find compromise and communication between Bobby Axelrod and Chuck Rhoades. The main characters insatiable greed has led them to indulge in misconduct, disregarding the ethical rules that govern investment and legal professionals in the real world.

Billions
Source: Showtime / Netflix.

CFA Institute’s Code of Ethics and Standards of Professional Conduct

The CFA Institute’s Code of Ethics and Professional Standards defines a comprehensive canvas for ethical and professional behavior. It states that it is for “investment professionals globally, regardless of job function, cultural differences, or local laws and regulations.” The Code places a strong emphasis on honesty to ensure that investment professionals operate in clients’ best interests. In “Billions”, the characters’ choices and actions often cross paths with these moral guidelines. In this article we will explore the three main characters Bobby Axelrod, Chuck and Wendy Rhoades through the lens of the CFA Code of Ethics and Standards of Professional Conduct.

“Billions” main characters: Bobby Axelrod, Chuck and Wendy Rhoades
Billions main characters: Bobby Axelrod, Chuck and Wendy Rhoades
Source: Netflix.

Bobby Axelrod: the hedge fund manager

Bobby Axelrod is the main character of the series “Billions”. He is the CEO of the hedge fund Axe Capital. Bobby Axelrod possesses exceptional financial acumen (the ability to make good judgements and take quick decisions) but his actions often push the boundaries of ethical behavior. These actions are driven by the drive to always beat the market at whatever cost.

Insider trading

By definition, insider trading is the illegal practice of trading on the stock exchange to one’s own advantage using material non-public information (confidential information).

One important ethical concern surrounding Bobby is his open willingness to engage in insider trading for himself and his firm. Despite having a legal department at Axe Capital, insider trading has been normalized throughout the series and undetected in most cases by the Securities and Exchange Commission (SEC) – the US authority in charge of regulating the financial markets. Bobby Axelrod gets his information through his extensive professional network and from his spies. Insider trading is forbidden by CFA standards of professional conduct as it violates point II.A. of CFA standards of professional conduct.

II.A. Material Nonpublic Information. Members and Candidates who possess material nonpublic information that could affect the value of an investment must not act or cause others to act on the information.

Insider trading is also forbidden by law in the United States. According to Cornell Law School “Courts impose liability for insider trading with Rule 10b-5 under the classical theory of insider trading and, since U.S. v. O’Hagan, 521 U.S. 642 (1997), under the misappropriation theory of insider trading”.

An example of insider trading is in the Episode 1 Season 1: “Pilot”. Bobby Axelrod approves a short-sell on Superior Automotive based on insider information. In this scene, Bobby Axelrod listens to two points of view: a deduction based on public information from one of his employees and another point of view based on confidential information from the character Dollar-Bill. When Axe asks Dollar-Bill “his level of certainty” about the excess supply that wasn’t disclosed by the company, there is a cut scene that shows the bribing with cash & watches of an employee of Superior Automotive and Dollar-Bill directly looking at the physical inventories of the company. To which Dollar-Bills answers famously “I am not uncertain”. When in possession of insider information, professionals cannot share, or influence action based on that information according to CFA Code of Professional Standards. Although Dollar-Bill is the one that actively tried to act on insider information, Axelrod is also in fault because of his lack of due diligence and supervision of his employee.

Independence and Objectivity

Bobby Axelrod has been found to use financial incentives to influence other people’s decisions in his favor. For example, Axelrod tipped the policeman that was going to arrest his employee. This tip avoided legal charges for his employee and bad image for the firm. Axelrod is found to disregard point I.B of the CFA standards of professional conduct.

I.B. Independence and Objectivity. (…) Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity.

In season 1 episode 7 “The Punch”, Bobby Axelrod pays a police officer named Lonnie Watley to prevent the arrest of one of his employees, Donnie Caan. Donnie Caan is a key member of Axe Capital, and Bobby Axelrod takes measures to protect him from legal troubles related to an insider trading investigation. In a later episode this incident was discovered by Raul Gomez, New York City Police and Fire Department Pension Fund Manager that asks him to not “greed” his colleagues in the future.

Unethical behavior

Axelrod frequently engages in aggressive tactics to push his personal agenda. A major example of unethical behavior is the Ice Juice Scheme from Season 2. In this case Bobby Axelrod sabotaged the initial public offering (IPO) of a company called “Ice Juice.” He used insider information to short the stock and profit immensely when the stock price immediate crash due to his scheme. His plan was to have some people get instantly sick after drinking Ice Juice and profit from media coverage. His scheme tampered with the public opinion and destabilised the fair consideration of Ice Juice on its IPO day. This also impacted his colleagues in the investment profession and their clients. According to point 1 of the CFA Code of Ethics this behaviour is unethical.

Act with integrity, competence, diligence, respect and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.

Chuck Rhoades: the US Attorney for Southern district of New York

Chuck Rhoades is the United States Attorney for the Southern district of New York. During the first season Chuck attempts to take down Bobby Axelrod to protect fair competition in the markets. Bobby and Chuck both used their network to try and destabilize the other but ended in a stalemate in the 1rst season. It is important to note that Chuck Rhoades is not an investment professional, but the Code and Standards promotes ethical guidelines that can be interpreted in various professions.

Fraud

Chuck’s methods and ethical choices also raise concern. Chuck often bends the rules, manipulates evidence, and employs coercion to secure convictions and survive in his industry. Manipulating evidence goes against point II.D of the Code of standards of professional conduct regarding misconduct.

II.D. Misconduct. Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence.

Conflicts of interests

Additionally, Chuck’s relationship with Wendy Rhoades, who works as a performance coach for Axe Capital, raises ethical concerns regarding conflicts of interest and the appropriate boundaries between personal and professional relationships. While Chuck initially recuses himself from the Axe Capital case, he continued to work on the case behind the scene. This goes against the interest of the American people because he is biased in his work. Point VI.A. of CFA standards of professional conduct on conflicts of interests states the following.

VI.A. Disclosure of Conflicts. Members and Candidates must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. Members and Candidates must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.

Wendy Rhoades: the middle woman

Wendy Rhoades is a performance coach at Axe Capital. She plays a key role in the series and is a powerful woman that often plays a role in resolving the fights between Axe and Chuck. Wendy tries to balance her professional responsibilities at Axe Capital while managing her personal relationship with Chuck Rhoades. Since Wendy Rhoades works in the finance industry she is therefore directly concerned by the Code of Ethics and Standards.

Whistleblowing

Wendy Rhoades is entrusted with confidential information, serving as a confidante to many within the organization. This fiduciary (involving trust) duty requires her to prioritize the interests and welfare of these individuals, acting with integrity and avoiding any conflicts that could compromise their trust. Across Season 2 we see that the information that Wendy has on the company is compromising and therefore we may ask ourselves if under national law she would be required to play a role of whistleblower. Indeed, Wendy has had knowledge of criminal activity and refused to whistle blow mostly due to her friendship with Bobby. This goes against point I.A of CFA standards of professional conduct.

I.A. Knowledge of the Law. Members and Candidates must understand and comply with all applicable laws, rules, and regulations (including the CFA Institute Code of Ethics and Standards of Professional Conduct) of any government, regulatory organization, licensing agency, or professional association governing their professional activities. (…) Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations.

Wendy’s loyalty to Bobby Axelrod adds another layer of complexity. Bobby relies heavily on Wendy’s expertise and guidance, seeking her advice on critical business decisions and relying on her insight into the minds of Axe Capital employees.

Wendy’s dual loyalties place her in a delicate position, as her duty to uphold the best interests of Axe Capital and with her personal relationship with her husband Chuck Rhoades.

Importance of ethics in the investment industry and popular media’s influence

Ethics play an important role in the investment industry as it gives it reputation and trust. A Code of Ethics and Professional Standards as proposed by the CFA Institute helps to work towards a stable financial system while reducing the likelihood of wrongdoings.

The Netflix series “Billions” that started in 2016, almost 10 years after the financial crisis of 2007 portrays traders as greedy and unethical in many cases. “Billions” stays nonetheless a fictional representation of the financial industry. However, this portrayal could badly influence and create false impressions, especially for future analysts and viewers who aspire to these positions.

Television shows and movies have the power to shape public opinion. “Billions” contributes to the overall perception of the financial sector along with other films like the Wolf of Wall Street and The Big Short. The financial sector is often a sector that is unknown or known very little by the average person. The portrayal of ethical dilemmas in popular media could raise awareness and generate important discussions about the role of ethics in finance. It encourages critical thinking and prompts viewers to question the ethical boundaries they would be willing to cross in pursuit of success.

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▶ Akshit GUPTA Securities and Exchange Commission

▶ Akshit GUPTA Short selling

▶ Akshit GUPTA Price fixing

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Useful resources

U.S Securities Exchange Commission (SEC)

Cornell Law School Insider trading

CFA Code of Ethics and Professional Standards

About the author

Article written in July 2023 by William LONGIN (EDHEC Business School, Global BBA, 2020-2024).

Top 5 companies by market capitalization in India

Top 5 companies by market capitalization in India

Nithisha CHALLA

In this article, Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023) presents the top 5 companies by market capitalization in India.

Introduction to market capitalization

Market capitalization is a crucial factor in investment analysis. Learning about the market capitalization of companies helps you evaluate their size, growth potential, and overall value in the market. This knowledge can assist you in making informed investment decisions and assessing the financial health of companies.

Top 5 companies by market capitalization in India

The top 5 companies in India according to market capitalization by 2023 are as follows:

1) Reliance Industries Limited
2) Tata Consultancy Services Limited
3) HDFC Bank Limited
4) Infosys Limited
5) Hindustan Unilever Limited

By looking at these top 5 companies, we observe that these companies mainly belong to the technology sector.

We detail below the characteristics of each company: statistics, analysis of revenues, and stock market data.

#1 Reliance Industries Limited

Logo of Reliance Industries Limited
Logo of Reliance Industries Limited
Source: the company.

Statistics

Market capitalization: $189 billion
Listed on exchanges: BSE, NSE
Listed on Stock Indexes: Nifty 50 Index.
Industry: Conglomerate (Energy, Petrochemicals, Telecommunications, Retail)
Location of headquarters: Mumbai, Maharashtra, India
Year founded: 1966
Number of employees: 342,982

Revenues

Reliance Industries Limited is a diversified conglomerate with interests in various sectors, including energy, petrochemicals, telecommunications, and retail. The company operates the largest oil refinery complex in the world and has a significant presence in the exploration and production of oil and gas. Reliance also operates India’s largest organized retail chain and is a major player in the telecommunications sector through its subsidiary, Reliance Jio. With its diverse business portfolio, Reliance Industries has been a key player in India’s economic growth.

Stock chart

Stock chart for Reliance Industries
Stock chart for Reliance Industries
Source: Yahoo! Finance.

The historical data for Reliance Industries stock prices can be downloaded from Yahoo! Finance website: Download the data for Reliance Industries

#2 Tata Consultancy Services Limited (TCS)

Logo of Tata Consultancy Services Limited.
Logo of Tata Consultancy Services Limited
Source: the company.

Statistics

Market capitalization: $153 billion
Listed on exchanges: BSE, NSE, NYSE
Listed on Stock Indexes: Nifty 50 Index and the BSE Sensex
Industry: Information Technology (IT Services, Consulting)
Location of headquarters: Mumbai, Maharashtra, India
Year founded: 1968
Number of employees: 528,748

Revenues

Tata Consultancy Services Limited (TCS) is a global leader in IT services, consulting, and business solutions. The company offers a wide range of services, including software development, infrastructure management, cloud services, and digital transformation solutions. TCS serves clients in various industries, including banking, finance, healthcare, retail, and manufacturing. With a strong focus on innovation and technology, TCS has established a strong reputation in the global IT industry and has been a significant contributor to India’s IT exports.

Stock chart

Stock chart for Tata Consultancy Services
Stock chart for Tata Consultancy Services
Source: Yahoo! Finance.

The historical data for Tata Consultancy Services stock prices can be downloaded from Yahoo! Finance website: Download the data for Tata Consultancy Services

#3 HDFC Bank Limited

Logo of HDFC Bank
Logo of HDFC Bank
Source: the company.

Statistics

Market capitalization: $111 billion
Listed on exchanges: BSE, NSE, NYSE
Listed on Stock Indexes: Nifty 50 Index and the BSE Sensex
Industry: Banking and Financial Services
Location of headquarters: Mumbai, Maharashtra, India
Year founded: 1994
Number of employees: 166,890

Revenues

HDFC Bank Limited is one of India’s largest private sector banks, providing a wide range of banking and financial services to individuals and businesses. The bank offers services such as savings and current accounts, loans, credit cards, insurance, and investment products. HDFC Bank has a widespread branch and ATM network across India and has embraced digital banking technologies to provide convenient and efficient banking solutions. With its strong customer base and robust financial performance, HDFC Bank has been a key player in India’s banking sector.

Stock chart

Stock chart for HDFC Bank
Stock chart for HDFC Bank
Source: Yahoo! Finance.

The historical data for HDFC Bank stock prices can be downloaded from Yahoo! Finance website: Download the data for HDFC Bank

#4 Infosys Limited

Logo of Infosys
Logo of Infosys
Source: the company.

Statistics

Market capitalization: $80 billion
Listed on exchanges: BSE, NSE, NYSE
Listed on Stock Indexes: Nifty 50 Index and the BSE Sensex
Industry: Information Technology (IT Services, Consulting)
Location of headquarters: Bangalore, Karnataka, India
Year founded: 1981
Number of employees: 335,186

Revenues

Infosys Limited is a global leader in IT consulting and services, offering a range of solutions such as application development, system integration, cloud services, and digital transformation. The company serves clients across various industries, including banking, finance, healthcare, and retail. Infosys has been at the forefront of innovation and technology.

Stock chart

Stock chart for Infosys
Stock chart for Infosys
Source: Yahoo! Finance.

The historical data for Infosys stock prices can be downloaded from Yahoo! Finance website: Download the data for Infosys

#5 Hindustan Unilever Limited

Logo of Hindustan Unilever Limited
Logo of Hindustan Unilever
Source: the company.

Statistics

Market capitalization: $75 billion
Listed on exchanges: BSE, NSE
Listed on Stock Indexes: Nifty 50 Index and the BSE Sensex
Industry: Consumer Goods (FMCG)
Location of headquarters: Mumbai, Maharashtra, India
Year founded: 1933
Number of employees: 149,000

Revenues

Hindustan Unilever Limited is one of India’s leading fast-moving consumer goods (FMCG) companies. It offers a wide range of products, including personal care, home care, and food and beverages. HUL’s popular brands include Lux, Lifebuoy, Dove, Surf Excel, Rin, Knorr, and Lipton, among others. The company has a strong distribution network that reaches millions of households across India. HUL has been a key player in the Indian consumer goods market, catering to the diverse needs of consumers and maintaining a strong market presence.

Stock chart

Stock chart for Hindustan Unilever
Stock chart for Hindustan Unilever
Source: Yahoo! Finance.

The historical data for Hindustan Unileverstock prices can be downloaded from Yahoo! Finance website: Download the data for Hindustan Unilever

Why should I be interested in this post?

As a management student, understanding the top companies in different markets and their market capitalization holds significant value. It provides you with industry insights, allowing you to comprehend the competitive landscape and trends within specific sectors.

Analyzing market capitalization aids in investment analysis, enabling you to assess the size, growth potential, and financial health of companies. Moreover, studying successful companies (success being measured by their market capitalization) provides valuable lessons in competitive strategy, organizational management, and leadership practices.

Related posts on the SimTrade blog

   ▶ All posts about financial techniques

   ▶ Nithisha CHALLA Market capitalization

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in China

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in the United States

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in Europe

Useful resources

Companies Market Cap Largest Indian companies by market capitalization

Yahoo! 15 Biggest Indian State-Owned Companies

Wikipedia List of largest companies in India

About the author

The article was written in June 2023 by Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023).

Top 5 companies by market capitalization in Europe

Top 5 companies by market capitalization in the Europe

Nithisha CHALLA

In this article, Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023) presents the top 5 companies by market capitalization in Europe.

Introduction to market capitalization

Market capitalization, often referred to as “market cap,” is a key metric used in the financial world to assess the size and value of a publicly traded company. Market capitalization provides insights into a company’s position in the market and its relative size compared to other companies. It is a measure of a company’s total market value, calculated by multiplying its current stock price by the total number of outstanding shares. It is an important indicator for investors, analysts, and market participants as it reflects the perceived worth of a company by the investing public. Note that market capitalization assesses the size of the company in the equity market, but the total value of the company measured by its assets or the sum of its liabilities and shareholders’ equity may be larger if the company uses debt (financial leverage).

Top 5 companies by market capitalization in Europe

The top 5 companies in the European market according to market capitalization by 2023 are as follows:

1) Nestlé S.A.
2) ASML Holding N.V.
3) Roche Holding AG
4) Novartis AG
5) SAP SE

By looking at these top 5 companies, we observe that these companies mainly belong to different sectors to the economy: Consumer Goods, Technology, and Healthcare.

We detail below the characteristics of each company: statistics, analysis of revenues, and stock market data.

#1 Nestlé S.A.

Logo of Nestle
Logo of Nestle
Source: the company.

Statistics

Market capitalization: $315.44 Billion
Listed on exchanges: SIX Swiss Exchange
Listed on Stock Indexes: Swiss Market Index (SMI) and the Euro Stoxx 50 Index.
Industry: Consumer Goods (Food and Beverage)
Location of headquarters: Vevey, Switzerland
Year founded: 1866
Number of employees: 342,982

Revenues

Nestlé is a multinational food and beverage company known for its wide range of products, including baby food, dairy products, confectionery, coffee, and pet care. The company owns popular brands such as Nescafé, KitKat, Maggi, Purina, and Nespresso. With a global presence, Nestlé serves consumers in various markets and has a strong focus on nutrition, health, and wellness. The company’s diverse portfolio and commitment to sustainability have contributed to its success in the European market.

Stock chart

Stock chart for Nestle
Stock chart for Nestle
Source: Yahoo! Finance.

The historical data for Nestle stock prices can be downloaded from Yahoo! Finance website: Download the data for Nestle

#2 ASML Holding N.V.

Logo of ASML Holding N.V.
 Logo of ASML Holding N.V.
Source: the company.

Statistics

Market capitalization: $280.24 Billion
Listed on exchanges: Euronext Amsterdam, NASDAQ
Listed on Stock Indexes: AEX Index.
Industry: Technology (Semiconductor Equipment)
Location of headquarters: Veldhoven, Netherlands
Year founded: 1984
Number of employees: 166,890

Revenues

ASML Holding is a Dutch company that specializes in the development and manufacturing of advanced semiconductor equipment used in the production of integrated circuits. The company’s lithography systems play a critical role in enabling the production of smaller, faster, and more efficient chips. ASML’s innovative technology and high-performance equipment have made it a trusted partner for semiconductor manufacturers worldwide. The company’s success has been driven by its focus on research and development, as well as its ability to meet the evolving demands of the semiconductor industry.

Stock chart

Stock chart for ASML
Stock chart for ASML
Source: Yahoo! Finance.

The historical data for ASML stock prices can be downloaded from Yahoo! Finance website: Download the data for ASML

#3 Roche Holding AG

Logo of Roche
Logo of Roche
Source: the company.

Statistics

Market capitalization: $253.04 Billion
Listed on exchanges: Swiss Exchange, OTCQX International Premier
Listed on Stock Indexes: Swiss Market Index
Industry: Healthcare (Pharmaceuticals)
Location of headquarters: Basel, Switzerland
Year founded: 1896
Number of employees: 149,000

Revenues

Roche Holding is a global healthcare company that operates in the fields of pharmaceuticals and diagnostics. The company focuses on developing and delivering innovative medical solutions to address various diseases, including cancer, infectious diseases, neuroscience disorders, and rare diseases. Roche’s pharmaceutical portfolio includes drugs for oncology, immunology, and other therapeutic areas. The company is also a leader in the diagnostics industry, offering a wide range of diagnostic tests and systems. Roche’s commitment to advancing healthcare and improving patient outcomes has solidified its position as a prominent player in the European market.

Stock chart

Stock chart for Roche Holding
Stock chart for Roche Holding
Source: Yahoo! Finance.

The historical data for Roche Holding stock prices can be downloaded from Yahoo! Finance website: Download the data for Roche Holding

#4 Novartis AG

Logo of Novartis
Logo of Novartis
Source: the company.

Statistics

Market capitalization: $208.78 Billion
Listed on exchanges: SIX Swiss Exchange, NYSE
Listed on Stock Indexes: Swiss Market Index
Industry: Healthcare (Pharmaceuticals)
Location of headquarters: Basel, Switzerland
Year founded: 1996
Number of employees: 335,186

Revenues

Novartis is a multinational pharmaceutical company focused on the research, development, and commercialization of innovative healthcare solutions. The company’s portfolio includes prescription medicines, generic drugs, vaccines, and consumer health products. Novartis operates in various therapeutic areas, including oncology, immunology, cardiovascular, and ophthalmology. With its commitment to advancing medical science and improving patient outcomes, Novartis has established itself as a leader in the European pharmaceutical industry.

Stock chart

Stock chart for Novartis
Stock chart for Novartis
Source: Yahoo! Finance.

The historical data for Novartis stock prices can be downloaded from Yahoo! Finance website: Download the data for Novartis

#5 SAP SE

Logo of SAP
Logo of SAP
Source: the company.

Statistics

Market capitalization: $154.66 Billion
Listed on exchanges: Frankfurt Stock Exchange
Listed on Stock Indexes: DAX Index
Industry: Technology (Enterprise Software)
Location of headquarters: Walldorf, Germany
Year founded: 1972
Number of employees: 528,748

Revenues

SAP is a leading enterprise software company that provides solutions for business operations, analytics, cloud computing, and customer experience. Its software applications help companies manage various aspects of their operations, including finance, human resources, supply chain, and customer relationship management. SAP serves clients across industries and has a strong presence in Europe and globally. The company’s innovative solutions and commitment to digital transformation have made it a key player in the European technology sector.

Stock chart

Stock chart for SAP
Stock chart for SAP
Source: Yahoo! Finance.

The historical data for SAP stock prices can be downloaded from Yahoo! Finance website: Download the data for SAP

Why should I be interested in this post?

As a management student, understanding the top companies in different markets and their market capitalization holds significant value. It provides you with industry insights, allowing you to comprehend the competitive landscape and trends within specific sectors.

Analyzing market capitalization aids in investment analysis, enabling you to assess the size, growth potential, and financial health of companies. Moreover, studying successful companies (success being measured by their market capitalization) provides valuable lessons in competitive strategy, organizational management, and leadership practices.

Related posts on the SimTrade blog

   ▶ All posts about financial techniques

   ▶ Nithisha CHALLA Market capitalization

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in China

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in the United States

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in India

Useful resources

Companies Market Cap Largest European companies by market capitalization

Statista Market capitalization of leading companies on Euronext stock exchange as of February 2023

Yahoo! 10 Best European Companies To Invest In

About the author

The article was written in June 2023 by Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023).

Top 5 companies by market capitalization in China

Top 5 companies by market capitalization in China

Nithisha CHALLA

In this article, Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023) presents the top 5 companies by market capitalization in China.

Introduction to market capitalization

Market capitalization, often referred to as “market cap,” is a key metric used in the financial world to assess the size and value of a publicly traded company. Market capitalization provides insights into a company’s position in the market and its relative size compared to other companies. It is a measure of a company’s total market value, calculated by multiplying its current stock price by the total number of outstanding shares. It is an important indicator for investors, analysts, and market participants as it reflects the perceived worth of a company by the investing public. Note that market capitalization assesses the size of the company in the equity market, but the total value of the company measured by its assets or the sum of its liabilities and shareholders’ equity may be larger if the company uses debt (financial leverage).

Top 5 companies by market capitalization in China

The top 5 companies in the Chinese market according to market capitalization by 2023 are as follows:

1) Tencent Holdings Limited
2) Alibaba Group Holding Limited
3) Meituan
4) JD.com, Inc.
5) Ping An Insurance (Group) Company of China, Ltd.

By looking at these top 5 companies in China, we observe that these companies mainly belong to the technology (e-commerce) sector.

We detail below the characteristics of each company: statistics, analysis of revenues, and stock market data.

#1 Tencent Holdings Limited

Logo of Tencent
Logo of Tencent
Source: the company.

Statistics

Market capitalization: $392.350 billion
Listed on stock indexes: HKEX
Listed on exchanges: HKEX
Industry: Technology (Internet Services, Social Media, Gaming)
Headquarters: Shenzhen, Guangdong, China
Year founded: 1998
Number of employees: 112,771

Revenues

Tencent Holdings Limited is a multinational conglomerate renowned for its diverse range of internet services and products. The company operates the popular social media platform WeChat, which offers messaging, payment, and social networking capabilities. Tencent is also a major player in the online gaming industry, with ownership of notable game studios and platforms. Additionally, Tencent provides online advertising services, streaming music, video content, and cloud services. The company has a strong presence in China and has expanded its influence globally.

Stock chart

Stock chart for Tencent Holdings Limited
Stock chart for Tencent Holdings Limited
Source: Yahoo! Finance.

The historical data for Tencent Holdings Limited stock prices can be downloaded from Yahoo! Finance website: Download the data for Tencent

#2 Alibaba Group Holding Limited

Logo of Alibaba
Logo of Alibaba
Source: the company.

Statistics

Market capitalization: $226.760 billion
Listed on stock indexes: HKD
Listed on exchanges: NYSE, HKEX
Industry: Technology (E-commerce, Cloud Computing)
Headquarters: Hangzhou, Zhejiang, China
Year founded: 1999
Number of employees: 251,462

Revenues

Alibaba Group Holding Limited is a multinational conglomerate specializing in e-commerce, retail, internet, and technology. The company operates various online marketplaces, including Taobao and Tmall, which connect buyers and sellers in both consumer and business-to-business transactions. Additionally, Alibaba provides cloud computing services (Alibaba Cloud), digital payment solutions (Alipay), and logistics services. With a dominant presence in the Chinese market, Alibaba has expanded its operations globally and plays a significant role in shaping the e-commerce industry.

Stock chart

Stock chart for Alibaba Group Holding Limited
Stock chart for Alibaba Group Holding Limited
Source: Yahoo! Finance.

The historical data for Alibaba Group Holding Limited stock prices can be downloaded from Yahoo! Finance website: Download the data for Alibaba

#3 Meituan

Logo of Meituan.
 Logo of Meituan
Source: the company.

Statistics

Market capitalization: $145.310 billion
Listed on stock indexes: HKEX, HKD
Listed on exchanges: HKEX
Industry: Technology (Online Services, Food Delivery)
Headquarters: Beijing, China
Year founded: 2010
Number of employees: 58,390

Revenues

Meituan is a leading Chinese e-commerce platform that specializes in providing various online services, including food delivery, restaurant reviews, hotel bookings, bike-sharing, and ride-hailing. The company’s primary business is its food delivery service, which has gained immense popularity in China. Meituan has expanded its offerings to include a range of lifestyle and travel-related services, catering to the diverse needs of its user base.

Stock chart

Stock chart for Meituan
Stock chart for Meituan
Source: Yahoo! Finance.

The historical data for Meituan stock prices can be downloaded from Yahoo! Finance website: Download the data for Meituan

#4 JD.com, Inc.

Logo of JD.com, Inc.
 Logo of JD.com, Inc
Source: the company.

Statistics

Market capitalization: $88.357 billion
Listed on stock indexes: HKEX
Listed on exchanges: NASDAQ, HKEX
Industry: Technology (E-commerce, Retail)
Headquarters: Beijing, China
Year founded: 1998
Number of employees: 314,906

Revenues

JD.com, Inc., also known as Jingdong, is one of China’s largest e-commerce platforms. The company operates an online marketplace that offers a wide range of products, including electronics, apparel, home goods, and more. JD.com follows a direct sales model, owning and operating its inventory, ensuring product authenticity and quality. The company has expanded into logistics and delivery services, enabling fast and reliable shipments across China. JD.com has a strong presence in both business-to-consumer (B2C) and consumer-to-consumer (C2C) markets.

Stock chart

Stock chart for JD.com, Inc.
Stock chart for JD.com, Inc.
Source: Yahoo! Finance.

The historical data for JD.com, Inc. stock prices can be downloaded from Yahoo! Finance website: Download the data for JD

#5 Ping An Insurance (Group) Company of China, Ltd

Logo of Ping An Insurance.
Logo of Ping An Insurance
Source: the company.

Statistics

Market capitalization: $118.750 billion
Listed on stock indexes: HKEX
Listed on exchanges: SSE
Industry: Financial Services (Insurance, Banking, Asset Management)
Headquarters: Shenzhen, Guangdong, China
Year founded: 1988
Number of employees: 362,000

Revenues

Ping An Insurance is a leading insurance and financial services company in China. It offers a wide range of insurance products, including life insurance, property and casualty insurance, health insurance, and asset management services. Ping An also operates a subsidiary bank, providing banking and financial services to individuals and businesses. The company has embraced technology and innovation, leveraging artificial intelligence, big data, and cloud computing in its operations. Ping An Insurance has a significant presence in the Chinese market and is recognized as one of the largest insurers globally.

Stock chart

Stock chart for Ping An Insurance
Stock chart for Ping An Insurance
Source: Yahoo! Finance.

The historical data for Ping An Insurance prices can be downloaded from Yahoo! Finance website: Download the data for Ping An Insurance

Why should I be interested in this post?

As a management student, understanding the top companies in different markets and their market capitalization holds significant value. It provides you with industry insights, allowing you to comprehend the competitive landscape and trends within specific sectors.

Analyzing market capitalization aids in investment analysis, enabling you to assess the size, growth potential, and financial health of companies. Moreover, studying successful companies (success being measured by their market capitalization) provides valuable lessons in competitive strategy, organizational management, and leadership practices.

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   ▶ Nithisha CHALLA Top 5 companies by market capitalization in Europe

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in the United States

   ▶ Nithisha CHALLA Top 5 companies by market capitalization in India

Useful resources

Companies Market Cap Largest Chinese companies by market capitalization

Yahoo! 15 Biggest Chinese State-Owned Companies

About the author

The article was written in June 2023 by Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management, 2021-2023).