Wal-Mart went public in October of 1970. Their IPO was 3,000 shares at a price of $16. 50 per share. By having a smart business model and keeping cost low though a variety of tactics including low employees wages and benefits, Wal-Mart has been able to sustain an incredible rate of growth. Since their IPO Wal-Mart has undergone eleven full 2-1 stock splits. That means that just one share of their IPO has turned into 2,048 current shares. The current market value of Wal-Mart stocks on the NYSE is $62. 0 per share. If an investor bought just one share in 1970 for $16. 50, today that investment would be worth $127,590. 40. In addition to rising stock value, investors receive a quarterly cash dividend payment that was paid out at $0. 2725 per share as of July 2009. People start and invest in businesses to make money. Wal-Mart should concentrate on serving their shareholders by producing profits because the business would not exist in the same capacity without their investment.
They have certainly done this, keeping their expenses low by paying minimum wage and limiting employee benefits in addition to a number of other influential factors has allowed Wal-Mart to recognize large profits, which serve its shareholders well. By paying employees low wages and limiting benefits in addition to savvy business planning Wal-Mart has grown into an incredibly profitable company. In 2010 they had revenues totaling $408,214,000,000 and more importantly they recognized a profit of $14,335,000,000.
Some of this profit is paid out to shareholders in the form of dividends but the vast majority is retained by Wal-Mart and reinvested. These retained earnings allow them to expand and open up stores all over the world. As they expand their operations they will employ more and more people. Wal-Mart has been known to open up stores in rural areas where unemployment rates happen to be especially high. By opening stores in these areas they are lowering unemployment and putting cash into the hands of people who desperately need it.
They currently operate more than 9,600 retail units in 28 countries around the world. They employ 2. 1 million people globally, including almost 1. 4 million in the United States alone. By generating an astounding amount of revenue and keeping there expenses as low as they can make them i. e. paying employees minimum wage and limiting benefits, Wal-Mart is able reinvest profits and open up new retail units that will employ lots of people who desperately need employment.
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