Quote:
Originally Posted by
Tallest Skil 
So will there ever be anything even remotely resembling an apology when these LIARS and IDIOTS manipulating the stock are wrong? Is there any legal recourse that Apple can take to protect themselves from this?
If not, this is basically the financial world equivalent of it being illegal for us to remove spam from the forum. But obviously infinitely more important, given that it's money involved.
Apple needs to buy itself and go private again. Keep breaking all of its sales and profit records quarter after quarter with no one to please but its customers, and be able to give two thumbs down (and simultaneously two birds up) to the analysts and shorters.
A stocks valuation is determined by:
The net present value of all future expected earnings.
That is a very tricky thing. Not only do you have to guess the future with whatever information you have today, but things like unexpected interest rate changes can cause an inflection in the NPV calculations and shift markets accordingly.
So essentially these 'idiot analysts' (and I put that in quotes because they are typically some of the smartest people you can find) have the job of predicting the future and estimating a stock target accordingly. They are usually very good at what they do and companies missing estimates by only a few pennies per share is the norm (if they miss at all).
In the cell phone market the 'future expected earnings' part can be summarized as 'number of units sold x margins per unit'
Apple at one time was valued at what, $660 billion dollars??!! That is based on a prediction of them selling a whole bunch of units at a very large margin.
Getting mad at analysts when a stock drops because a company doesn't meet expectations isn't really rational. It is part of the definition of the stock price. In fact, analysts with outrageously high expectations are exactly what is required to have an outrageously high stock price. By definition.
Apple does have some very high expectations. But that is also the basis of having the crazy insane market value that it has. In order to hold that value Apple has to do both- sell a crazy large amount of phones AND at a crazy large margin. If it can't do both it is incorrectly priced and its value is going to drop.
Yes, it is all about expectations... But statements like 'Apple sold 2 million units and its stock is going to drop but if Microsoft sold that many they'd be jumping through the roof- analysts are biased against Apple!' just don't make any sense. If Apples valuation was based on them selling 4 million units and they 'only' sold 2 million phones then it means their prior valuation was excessively high. Their stock valuation target should drop by '2 million units x margin per unit/shares outstanding' It is straightforward math. If Microsofts stock value was based on them selling 10,000 phones in China and all of a sudden they sold 2,000,000 you betcha their stock would go up. While it might not sound 'fair' on paper it is the very reason Apple has more than double the market value of Microsoft.
