Apple Q1 2013 earnings preview: The pressure is on - Page 2

Originally Posted by cameronj 

So that means that while individual stockholders were selling over the past 4 years of gains, hedge funds have held and bought more, leaving them the only ones who still believe in the long term for Apple.

I suggest a reverse split of 10:1 to get the stock price up high enough so Apple is no longer held by the fickle individual shareholders who just are there trying to make a quick buck.

Gee, when you forget about who you are being told to hate, it sure is easy to see an argument FOR institutional owners, isn't there?  Or did you think they came to hold 70% of outstanding shares in some way other than buying, buying, and buying while others were selling?

Originally Posted by melgross 


Well, these guys are like everyone else—they want profits on their investments. A problem the way these, and other investment houses work, is that they almost always have limits to the percentage of ownership in any investment vehicle. So if they are limited to having any one stock to no more than 8% of their investment, by their charter, then what happens when they reach that limit? If Apple is over 70% owned by institutions with these limits, what happens when most, or all, are fully vested in Apple stock?

One thing that happens is that the frenzied buying slows down dramatically. Then the stock price begins to waver. What happens when there is fear that large investment profits may be taxed at a higher level because of the "fiscal cliff"? We get a big sell off. What happens to the stock price, well, it tumbles. What happens when large corporate options traders have strike off prices that might not be met? I'm generalizing terribly here. They buy or sell off very large amounts of stock (which they are allowed to do) so that the stock price comes to where they need it to be to make those large profits, and not end up with losses. Is that manipulation? Sure, though some refuse to call it that because there isn't a coordinated effort, just the fact that many professional traders have the same ideas at the same time (surprise!). We had that on the 18th of this month last Friday. So we were being told that Friday would possibly be the last great opportunity to buy Apple stock at a bargain price.

I believe that many professional traders aren't really concerned about the long term future of a company at all. They are just looking at more immediate results for themselves. If that results in large movements of stock, they don't really care. After all, you can make large amounts of money whether a stock is going up or down.

Originally Posted by maccherry 

We all know Wall Street is a casino. Their wish list is nothing shy of insanity. The consumer can only buy so much. So when Apple or any other public company doesn't measure up they crucify them. It is insane!! Wall Street makes these bets ahead of time and then puts the full court pressure on these companies prior to earning reports.
In the end Wall Street could even get Tim kicked out, find another CEO. Happens all the time.
Look at Palm. Company was broken up into hardware and software then finally sold off to them clowns at HP.
Bottom line: Greed.

Originally Posted by lightstriker 

What will happen if Apple pull out of Wall Street listings? Does Apple need to sell shares to raise capital? 

Originally Posted by crazy_mac_lover 


The biggest joke I have ever heard

Originally Posted by melgross 


Ah, but you are misunderstanding the upheaval in the computer industry. People have made that mistake before. Minicomputers would never become a serious computing platform because they could not do what mainframes could do, and they would fade away. Workstations couldn't do what minicomputers could do, and so they would fade away. Microcomputers would never be taken seriously because they were toys that couldn't do any real work. Laptops were useless because they were so much less powerful than desktops, that they would never be used for real work. Notebooks were not usable for business or other serious computing tasks because they weren't as powerful as laptops. And, of course, tablets are just another fad and toy, and will fade away after a few years, and notebooks will, again, become the primary computer used for work and play.

Yup, you sure don't understand the computing industry.

It was estimated that by 2015, tablet sales would overtake all laptop sales for that year. Now, they are saying it will happen this year. The numbers are there. We're not talking about netbooks, which were mainly a child of the Recession. This is very different. I can already do work on my iPad that I could just barely do 10 years ago on my Powermac. In two or three years, the iPad will be several times as powerful as it is now. Heck, my iPhone 5 is more powerful than the fastest G4 laptop Apple manufactured. In another year or so, the newest iPhone and iPad will be more powerful than the earlier generations of Intel laptops, and the earlier Intel Mac Pro machines.

Things are changing for sure. The largest companies and government agencies are abandoning their notebooks for tens of thousands of iPads. This doesn't indicate a fad, even if you may want to think so.

Originally Posted by melgross 


Well, these guys are like everyone else—they want profits on their investments. A problem the way these, and other investment houses work, is that they almost always have limits to the percentage of ownership in any investment vehicle. So if they are limited to having any one stock to no more than 8% of their investment, by their charter, then what happens when they reach that limit? If Apple is over 70% owned by institutions with these limits, what happens when most, or all, are fully vested in Apple stock?

One thing that happens is that the frenzied buying slows down dramatically. Then the stock price begins to waver. What happens when there is fear that large investment profits may be taxed at a higher level because of the "fiscal cliff"? We get a big sell off. What happens to the stock price, well, it tumbles. What happens when large corporate options traders have strike off prices that might not be met? I'm generalizing terribly here. They buy or sell off very large amounts of stock (which they are allowed to do) so that the stock price comes to where they need it to be to make those large profits, and not end up with losses. Is that manipulation? Sure, though some refuse to call it that because there isn't a coordinated effort, just the fact that many professional traders have the same ideas at the same time (surprise!). We had that on the 18th of this month last Friday. So we were being told that Friday would possibly be the last great opportunity to buy Apple stock at a bargain price.

I believe that many professional traders aren't really concerned about the long term future of a company at all. They are just looking at more immediate results for themselves. If that results in large movements of stock, they don't really care. After all, you can make large amounts of money whether a stock is going up or down.

Originally Posted by umrk_lab 

 

 

Indeed. the insistence of some people to consider the existence of the keyboard to qualify a machine for "serious work" is pathetic, and reminds me some previous similar statements about the mouse .... At that time, too, the well known corporate statement was "nobody has ever got fired because of purchasing from IBM ..."

Originally Posted by cameronj 

All that may be true.  But the fact is, big institutions are the remaining holders of Apple - you can't blame THEM for the drop in the stock because they're the only ones left!

Originally Posted by lightstriker 

What will happen if Apple pull out of Wall Street listings? Does Apple need to sell shares to raise capital? 

Originally Posted by Mikeb85 

Great post.  One of the few with some sense and understanding of capital markets.  

This is why for a 'trader' Apple stock isn't particularly attractive.  However if the stock comes back down to 350 or so then it looks attractive perhaps as a longer term investment, assuming management is up for dividend increases and whatnot.  

Originally Posted by melgross 
Anyone know how to raise $500 billion to take Apple private?

Originally Posted by Mikeb85 

Perhaps a bad analogy, since IBM still has some of the best enterprise products, except today it's supercomputers, Linux, analytics, etc...  Apple also doesn't compete with anything IBM does.