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Wall Street concerned by lower-than-expected iPhone sales in Apple's holiday quarter

post #1 of 170
Thread Starter 
Though Apple sold a record number of iPhones to finish 2013, exceeding 50 million in three months for the first time ever, total sales came in below investors' expectations. As a result, Wall Street analysts have expressed concern about future growth potential for the company's flagship product.

Cube


Apple reported earnings for its first quarter of fiscal 2014 on Monday, revealing it earned $13.1 billion in profit, driven by sales of 51 million iPhones and 26 million iPads. While iPad sales were slightly higher than expected, the performance of the iPhone came in lower than the 56.5 million iPhones Wall Street expected Apple would sell.

Analysts issued notes to investors following Apple's earnings report, in which many of them expressed concern about iPhone sales in the coming quarters. AppleInsider offers a roundup of what analysts are saying in the wake of Apple's best-ever fiscal performance.

Wells Fargo

Analyst Maynard Um noted that Apple's revenue of $57.59 billion and earnings per share of $14.50 were ahead of Wall Street expectations, due in part to higher-than-expected gross margins of 37.9 percent. But that surprise couldn't offset disappointment over the iPhone sales, which Um said leave questions about end demand.

The analyst said the fact that carriers are becoming more strict to 24-month upgrade cycles could serve as a sign that the "balance of power" between wireless providers and smartphone makers is shifting back to carriers.

Um expects that Apple's 2014 will be highlighted by new products, including a next-generation iPhone and a potential wrist-worn device. But Wells Fargo has maintained its "market perform" rating, citing concerns over carriers regaining strength, potential gross margin pressures from an anticipated iPhone redesign, and limited incremental market cap opportunity in existing market segments where Apple competes.

iPhone 5 with iOS 7


Cantor Fitzgerald

"AAPL is down but not out," analyst Brian White proclaimed on Tuesday. He believes Apple must introduce a new product category and initiate a larger stock buyback to appease investors.

White agrees with activist investor Carl Icahn, who has been pushing Apple to spend more of its cash on itself, buying back shares and returning the money to investors. White expects that Icahn's voice will "become even louder in the coming weeks."

As for the company's products, White said it's "more clear than ever" that Apple needs to introduce an entirely new product to return to the kinds of growth trends the company previously saw. He also noted better-than-expected earnings per share performance, and strong gross margins.

Piper Jaffray

While underlying iPhone growth is a "core question" for Apple according to analyst Gene Munster, the company's 2014 product cycle is something to get excited about. While he doesn't expect any major new releases until this fall, Munster does see reasons for investors to buy in the near-term.

"(Apple's March 2014) guidance strengthens the idea of AAPL as a stock to own through product cycles, given that the maturity and size of its core markets will make it difficult for new products to meaningfully reaccelerate revenue growth," he said.

Munster advised investors to buy more shares of AAPL on any pullback that may come from the company's disappointing December 2013 results. In pre-market trading through Tuesday morning, shares of Apple had tumbled more than $40.



Cowen and Company

Wall Street's "obsession" with unit sales continues, analyst Timothy Arcuri said. He characterized weaker iPhone sales as a "curve ball," but sees the unexpected result as a "unique buying opportunity" for investors.

"If the ~10% aftermarket move holds up (Tuesday), we would be buyers of every share possible at such levels, as such a correction in a stock of this size/quality does not come along often," Arcuri wrote.

Evercore Partners

The new plastic iPhone 5c is "looking like a dud," analyst Rob Cihra said. He believes the high-end mix of Apple's products, in particular toward the iPhone 5s, is "both a blessing and a curse."

The curse side of it, in Cihra's view, is the fact that Apple now has an installed base of about 280 million iPhone users, with replacement purchases representing about 74 percent of that mix. That's because the high-end smartphone market appears to be topping out, he said, with mid-range smartphones posting the most growth.

Needham & Company

Analyst Charlie Wolf was surprised that the issue for Apple's December quarter iPhone sales was not international markets. The company saw its sales grow 76 percent in Latin America, 65 percent in the EMEA region, 40 percent in Japan, and 20 percent in China.

"Rather, the shortfall stemmed from lower than expected sales in the U.S.," he said. "Apple attributed part of the domestic shortfall to a change in carrier upgrade policies, which stretched the iPhone upgrade cycle among owners of the iPhone."

Moving forward, the larger question for Apple, according to Needham, is whether the company can grow iPhone sales while maintaining its place as an "aspirational brand."

Mac Pro


RBC Capital Markets

Beyond the lack of iPhone growth, investors are also concerned about "lack of product innovation," analyst Amit Daryanani said. He expects the stock to stay in the $500 to $550 range in the near term, though he sees potential upside catalysts coming in the form of capital allocation, growth from China Mobile, new product cycles, and potential new revenue streams from new product categories.

Looking forward to the next quarter, Daryanani expects revenue to be flat on a year over year basis. He noted that gross margins beat expectations in December, and are expected to remain stable moving forward in the short-term.

J.P. Morgan

Shares of Apple will be under pressure in the near term as investors react to an "air pocket" in the company's route, analyst Mark Moskowitz said. He recommends that investors take advantage of any near-term weakness.

"We think investor sentiment will be bruised by the slowing iPhone momentum and indications the company misread market conditions with its rollout of the iPhone 5c among other factors," he said. "We think both are explainable and can be overcome, though."

Moskowitz also cited higher-than-expected iPad sales as one product category that could counter investor frustrations with iPhone business trends.

"Double-digit growth in China and strong demand in emerging markets could indicate the tablet adoption wave may not be over, yet," he said.

Cantor Fitzgerald

Apple's outlook for the current March quarter is conservative, analyst Brian White believes. Prior to Monday's announcement of projected sales between $42 billion and $44 billion for the quarter, Wall Street consensus was at around $46.1 billion

White said Apple's "soft" outlook for the second quarter of fiscal 2014 could give Icahn "more ammunition in pushing through his increased stock repurchase program."

iMac


BMO Capital Markets

iPhone average selling prices increased almost 12 percent quarter over quarter in December, analyst Keith Bachman noted. He believes that strong sales of the iPhone 5s and its high price points helped push gross margins higher than expected.

Bachman's concerns for Apple go beyond the current March quarter and into June. He's modeling June quarter revenue to decline by more than 16 percent quarter over quarter, which would exceed the average decline of 15 percent seen in the company's previous two June quarters.

JMP Securities

Analyst Alex Gauna remains "fundamentally neutral" on Apple stock, citing what he sees as a balanced risk and reward scenario. Specifically, he said innovation potential at Apple is offset by what he sees as a "lack of confidence inspiring execution recently."

He also said that any potential unit volume upside potential from emerging markets is offset by price sensitivity and competitive dynamics. And while Apple has a considerable amount of cash, he sees that offset by a "slowing pace of buybacks."
post #2 of 170
WS: it's Apple's fault that its actual data does not correspond to my wild guessing.
post #3 of 170

LOL how come I barely hear any concern over Samsung's recent disappointing sales figures?

LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
Reply
post #4 of 170

I'll be happy when Wall Street starts being concerned over something else. Thankfully it's the State of the Union tonight so they'll have something else to talk about tomorrow.

post #5 of 170
Apple beat top and bottom line analyst estimates.  If like all the other tech companies Apple refused to report sales figures no one would have known what the sales makeup was.  Then the only news would be that Apple beat estimates.  Why does Apple get punished for providing the most information??
post #6 of 170
Why people still give these people any credit?
Because they are rich?

And the BBC is off, very off on this.
I wonder if it is a vendetta or just pure stupidity.
post #7 of 170

Analysts: Let's roll the dice 5 times and use that for the number of iPhones we're guessing Apple will sell. That should satisfy all our investors. Of course if Apple's results don't agree with our attempt at Yahtzee, we'll blame them with some bogus, made-up reason. That's why we get the big bucks!! Let's hide those meaningless things like higher gross margins. That doesn't really mean anything. All that matters is whether we're right and Apple's wrong, which they always are. They just can't get it right and we keep trying to help them. Why won't they just listen to us????? 

 

One of these days real investors will finally question the stupidity of these analysts and quit using them. That day couldn't quickly enough for me. To those analysts who continue to try and tell Apple how to run their company--go away, you haven't the foggiest idea how to develop products and support them. If you did, you'd have a real job.

post #8 of 170

Stock is down 42.46$ as of this moment. It seems Apple has finally attracted the attention of "investors" that nobody really wants. It's a sick world we live in, where you can post a profit of over 13 billion and be punished for it by an 8% stock drop.

 

This is ridiculous.

 

P.S.: That also means by buying today, you'll make 8% profit within a week's time.

Matyoroy!
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Matyoroy!
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post #9 of 170
Quote:
Originally Posted by GregInPrague View Post


Easy. They all know that Apple will continue, at least in the short term, to be a stock to own. The line about "if this holds, we will buy every share possible" should be enough. This "beating" they will take today (off about 8% as I write) is a form of (currently legal) manipulation.
post #10 of 170
Quote:
Originally Posted by BuddyRevell View Post
 

LOL how come I barely hear any concern over Samsung's recent disappointing sales figures?

Because you only read Apple sites and stay in the echo chamber.  And who cares about Samsung's figures when the article is about Apple?  Why must you keep referring to Samsung when something negative (and even positive) is mentioned about Apple.  It's silly to compare the two.

post #11 of 170
Quote:
Originally Posted by G-News View Post
 

Stock is down 42.46$ as of this moment. It seems Apple has finally attracted the attention of "investors" that nobody really wants. It's a sick world we live in, where you can post a profit of over 13 billion and be punished for it by an 8% stock drop.

 

This is ridiculous.


Actually this is an opportunity for Apple to buy back more of its shares at a lower price. The less shares there are for the likes of Icahn to manipulate, the better off they'll be.

post #12 of 170
Carl Ichan is right about one thing, Apple should be buying back more stock. At these prices it it will improve the EPS over time and lower dividend payments.

It is time to take those shares out of weak hands!
post #13 of 170

AAPL buying opportunity.  Everyone just need to adjust to the fact that AAPL is no longer a growth stock... until Apple enters a new category.  

post #14 of 170
Nothing will satisfy the ANALysts about Apple.

Record sales? Bah humbug! they say. After all Apple doesn't have high marketshare.

Record profits? Bah humbug! they say. After all what is Apple going to do next year?

New product? Buah humbug! they say. It obviously will fail.

There is nothing Apple can do that is right.

ANALysts would rather take it up the rear and invest in never profiting Amazon than invest in hugely profitable Apple. After all, Apple is obviously in its deathbed, right?
post #15 of 170
Considering the durable goods report that just came out today maybe Apple over-performed against what looks to be considerable multi-industry weakness all around it.
post #16 of 170
Quote:
Originally Posted by G-News View Post
 

Stock is down 42.46$ as of this moment. It seems Apple has finally attracted the attention of "investors" that nobody really wants. It's a sick world we live in, where you can post a profit of over 13 billion and be punished for it by an 8% stock drop.

 

This is ridiculous.

 

P.S.: That also means by buying today, you'll make 8% profit within a week's time.

 

Stock price is a valuation.  Apple has an incredibly high valuation (market cap).

 

Would you agree that all else equal, a company that makes 15 billion a year is worth more than 13 billion a year?  Of course it is.

 

If Apples valuation was based on them making 13.5 billion dollars, and they 'only' make 13.1, their stock *should* go down.  Not because $13.1 billion is a 'bad' or 'doomed' number- it just isn't as much as they were valued at.  Similary if they were valued at an expectation of making 13.5 billion dollars and they had reported 14 billion, Apple would have proven they can beat expectations.  That's just how it works.

 

The arguments cited are very real concerns for Apple investors (other than those who blindly invest because they 'love' Apple).  Apple posted record revenues on record sales, yet posted less profit than they had in Q1 of 2012.  If they are making less profits with more sales, in order to make more money in the future they need to either post even higher sales again, or increase their margins.  In a market with slowing growth (even stagnation approaching in the high end devices) neither of those seem likely.  It is a question Apple needs to find an answer to in order to maintain their current valuation (much less a higher one).  Hopefully Apple will find that answer.

post #17 of 170

in Q1 and that's a disappointment? Wall street greed.

post #18 of 170
Quote:
Originally Posted by starbird73 View Post


Easy. They all know that Apple will continue, at least in the short term, to be a stock to own. The line about "if this holds, we will buy every share possible" should be enough. This "beating" they will take today (off about 8% as I write) is a form of (currently legal) manipulation.

 

+1

 

Couldn't agree more.

post #19 of 170

If a valuation is only supposed to be based on the net profits a company gets each year, then yes, your logic would hold.

In the old days, buying stock was called buying shares. Meaning you bought part of the company as a commitment, because you believed in what they did and wanted to help them finance new investments. That time is sadly long gone. People just care about their own profits now and the company as well as their work is irrelevant as long as the stock prices go up after you've bought your share.

 

It's a fundamental flaw in the system and one of the main reasons why the financial and economical markets in the world are fluctuating massively, and more so with each passing decade, it seems.

 

Maybe it's time dividends were forbidden, so that we'd go back to investing instead of speculation.

Matyoroy!
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Matyoroy!
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post #20 of 170
Quote:
Originally Posted by Frood View Post

Stock price is a valuation.  Apple has an incredibly high valuation (market cap).

Would you agree that all else equal, a company that makes 15 billion a year is worth more than 13 billion a year?  Of course it is.

If Apples valuation was based on them making 13.5 billion dollars, and they 'only' make 13.1, their stock *should* go down.  Not because $13.1 billion is a 'bad' or 'doomed' number- it just isn't as much as they were valued at.  Similary if they were valued at an expectation of making 13.5 billion dollars and they had reported 14 billion, Apple would have proven they can beat expectations.  That's just how it works.

The arguments cited are very real concerns for Apple investors (other than those who blindly invest because they 'love' Apple).  Apple posted record revenues on record sales, yet posted less profit than they had in Q1 of 2012.  If they are making less profits with more sales, in order to make more money in the future they need to either post even higher sales again, or increase their margins.  In a market with slowing growth (even stagnation approaching in the high end devices) neither of those seem likely.  It is a question Apple needs to find an answer to in order to maintain their current valuation (much less a higher one).  Hopefully Apple will find that answer.
Q1 2012? Did you mean 2013? And I thought Apple's profit was flat YOY not down.
post #21 of 170

"Down but not out!" Give me a break.

post #22 of 170
Quote:
Originally Posted by jungmark View Post

WS: it's Apple's fault that its actual data does not correspond to my wild guessing.
Actually, Apple admitted that it misjudged iPhone 5C sales. That isn't wall street's miscalculation, it's Apple's miscalculation. It was obvious to me that the 5c was priced too high. I understand that Apple didn't want to lose margin. However, this is the classic big business trap....making too much money, can't pivot. Apple will continue to make boatloads of money but growth of the iPhone is over.
I'm looking to iPad for future growth, but it is much much slower than iPhone. iPad will take over the PC at the same rate the PC declines, which will be really slow.
post #23 of 170
So if you bought Apple's stock at $550.00 you just lost $50 even though Apple just posted the best sales of their existence. You got f***ed by Wall Street homey!!!!
The system on Wall Street sets itself up intentionally in order to short the stock.
You are a part owner of Apple and Wall Street just screwed you for $50 dollars even though Apple just popped 15 billion into the bank.
Where is the outrage! At the end of the day this is the whorish business model of Wall Street.
post #24 of 170
They pull numbers etc out of their butts based on nothing but air. Always way too high. Then they diss that the number isn't met when they should be looking at 'yet again Apple's iPhone sales have bested all previous quarters, setting a new record at . . . "

Same thing with the iRing, iWatch, iTV etc. Zero proof that Apple is doing anything other than patenting ideas and building in more support for others to do something and yet the analysts parade out 'productions issues' that will 'delay' these myths.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply
post #25 of 170
Quote:
Originally Posted by ash471 View Post

Actually, Apple admitted that it misjudged iPhone 5C sales. That isn't wall street's miscalculation, it's Apple's miscalculation. It was obvious to me that the 5c was priced too high. I understand that Apple didn't want to lose margin. However, this is the classic big business trap....making too much money, can't pivot. Apple will continue to make boatloads of money but growth of the iPhone is over.
I'm looking to iPad for future growth, but it is much much slower than iPhone. iPad will take over the PC at the same rate the PC declines, which will be really slow.
iPhone growth is over? Sorry you cannot say that with such certainty. On the conference call yesterday Cook mentioned that iPhone sales were up pretty much everywhere but North America.
post #26 of 170
Quote:
Originally Posted by G-News View Post

If a valuation is only supposed to be based on the net profits a company gets each year, then yes, your logic would hold.
In the old days, buying stock was called buying shares. Meaning you bought part of the company as a commitment, because you believed in what they did and wanted to help them finance new investments. That time is sadly long gone. People just care about their own profits now and the company as well as their work is irrelevant as long as the stock prices go up after you've bought your share.

It's a fundamental flaw in the system and one of the main reasons why the financial and economical markets in the world are fluctuating massively, and more so with each passing decade, it seems.

Maybe it's time dividends were forbidden, so that we'd go back to investing instead of speculation.
We just have more solid evidence that the growth story at Apple has come to an end. It doesn't mean Apple makes bad products or that Apple is on the decline. It means it has tapped out its market. Since Apple doesn't care to compete in the low end of the market it can't continue to grow.
post #27 of 170

"AAPL is down but not out," analyst Brian White proclaimed on Tuesday. He believes Apple must introduce a new product category and initiate a larger stock buyback to appease investors...

 

I say don’t appease investors. Let the stock drop like a rock, then use the cash to take the company private. Of course I don’t own any AAPL so...

post #28 of 170
Mum says it gives people jobs to do ;p

What a load of rubbish they write....more about attempts to manipulate the stock price / sell a story / goad apple into a new launch?

Apple are flying high no question. Put that in your analysts pipe and smoke it.
post #29 of 170
Quote:
Originally Posted by ash471 View Post
 
Quote:
Originally Posted by jungmark View Post

WS: it's Apple's fault that its actual data does not correspond to my wild guessing.
Actually, Apple admitted that it misjudged iPhone 5C sales. That isn't wall street's miscalculation, it's Apple's miscalculation. It was obvious to me that the 5c was priced too high. I understand that Apple didn't want to lose margin. However, this is the classic big business trap....making too much money, can't pivot. Apple will continue to make boatloads of money but growth of the iPhone is over.
I'm looking to iPad for future growth, but it is much much slower than iPhone. iPad will take over the PC at the same rate the PC declines, which will be really slow.

 

Their misjudgement was only in the relative numbers of 5s and 5c, since the total came out near the top of Apple's own estimate, so that argument is weak. If the stock were down purely due to the lowered 2014 forecast then that might make sense, but if it is because Apple missed Wall Street's inflated estimates then not so much.

post #30 of 170
Quote:
Originally Posted by G-News View Post
 

If a valuation is only supposed to be based on the net profits a company gets each year, then yes, your logic would hold.

In the old days, buying stock was called buying shares. Meaning you bought part of the company as a commitment, because you believed in what they did and wanted to help them finance new investments. That time is sadly long gone. People just care about their own profits now and the company as well as their work is irrelevant as long as the stock prices go up after you've bought your share.

 

It's a fundamental flaw in the system and one of the main reasons why the financial and economical markets in the world are fluctuating massively, and more so with each passing decade, it seems.

 

Maybe it's time dividends were forbidden, so that we'd go back to investing instead of speculation.

Thank you for saying what I've been saying for a long time. My father-in-law was an old time broker and always bought stock for the long term. He finally retired at age 82 because he couldn't keep up with the new age brokers who bought and sold at lightning speed while collecting very small commissions. As anyone who's followed brokers, they get paid whether a stock goes up or down so they trade constantly to make money. They are the ones messing up the world and it's time the entire stock market gets restructured before the entire world's economy collapses. Of course, someone will always make money when this happens.

post #31 of 170
Umm, growth was 6.7%, down from mid twenties last year and down from like more than fifty percent the years before that. more importantly it is growing more slowly than the market. So yes, I'm certain the growth story in iPhone is over. Apple makes great phones, but the competition has caught up and people are not motivated by features like fingerprint recognition. Don't get me wrong, owning the most profitable segment of the market is a great thing, but that doesn't change the fact that the growth story is OVER, at least for the iPhone.
post #32 of 170
Quote:
Originally Posted by ash471 View Post


We just have more solid evidence that the growth story at Apple has come to an end. It doesn't mean Apple makes bad products or that Apple is on the decline. It means it has tapped out its market. Since Apple doesn't care to compete in the low end of the market it can't continue to grow.

What a bunch of garbage. Apple has never competed in the low end of any product they have ever made. Apple continues to grow anyway. It develops new products it sees fit to market. It doesn't drop a ton of garbage every third Wednesday like others do. Do you realize how many of these low end products end up being sold at throw-away stores a few weeks after they are released? Apple isn't involved in this market because it doesn't have to be. The winner isn't the company that sells the most garbage, it's the one that sells what people keep and return to buy more. Every market can be "tapped" out but Apple has the ability to create new markets and has done so. Wall Street just doesn't understand great new products aren't released every week even when they think they should be. Wall Street is the worst click-bait organization in the world. It needs people to buy and sell stock so it makes money. Plain and simple.

post #33 of 170
Vultures circling, calling for Apple to kill itself to line their pockets a little more.
post #34 of 170
Quote:
Originally Posted by ash471 View Post

Umm, growth was 6.7%, down from mid twenties last year and down from like more than fifty percent the years before that. more importantly it is growing more slowly than the market. So yes, I'm certain the growth story in iPhone is over. Apple makes great phones, but the competition has caught up and people are not motivated by features like fingerprint recognition. Don't get me wrong, owning the most profitable segment of the market is a great thing, but that doesn't change the fact that the growth story is OVER, at least for the iPhone.

You do realize that numbers can be manipulated by anyone. In the early days of the iPhone it was easy to have 50% growth YoY because there were much fewer iPhones. Now there are millions of iPhones. Growth of 6.7% can easily be the equivalent number of iPhones as 50% was a couple years ago. Apple is selling iPhones but it gets more difficult to sell the same percentage more every year. This is simple math.

post #35 of 170
I'd hate to be Tim Cook right now. Wall Street wants his head on a platter. I wouldn't be surprised if we start hearing calls for Cook to be replaced. I think it's nonsense but it won't surprise me.
post #36 of 170

51 million iPhones. 

 

And that doesn't even include the low-end of the retail pyramid. Apple doesn't cater to a big chunk of the market, and they still end up selling 51 million, with barely more than a few models. 

 

Not only does Apple own the money-making end of the market at large, they also sell a boatload of those few, clearly-differentiated (vis-a-vis the competition) models to that market. 

 

Given all that, Apple seems to be the only one playing the game right. The right mix of market-share + profit. Samsung is getting schooled on this at the moment. 

post #37 of 170
Quote:
Originally Posted by Rogifan View Post

iPhone growth is over? Sorry you cannot say that with such certainty. On the conference call yesterday Cook mentioned that iPhone sales were up pretty much everywhere but North America.
Microsoft reported record earnings this month. Would you say MS is growing? If Apple sold even one more phone then lat year they technically grew, but that's not what I consider to be growth. If growth is in the single digits and less than the market, that isn't "growth"
Wall Street didn't have inflated expectations. They had reasonable expectations for growth. Do you really believe Apple had expectations for 6.7% growth? I don't understand how you could think these result are anything but disappointing.
post #38 of 170
Quote:
Originally Posted by ash471 View Post


growth of the iPhone is over.
 

 

Nope. 

 

China.

post #39 of 170
Quote:
Originally Posted by ash471 View Post


Microsoft reported record earnings this month. 

 

 

Yes, but from what?

 

It's been from all the wrong things vis-a-vis the changing market dynamics for the past several years. 

 

MS can make an obscene amount of money selling rubber dogshit too, but that doesn't quite help their flat-footed mobile strategy.

post #40 of 170

The bottom line painful truth for stockholders and Cook makes this very clear by his actions is that they don't care about the stock.  Cook and his executives have already cashed out their options as soon as they vested, holding very few options or none at all.  They have made 10's and 100's of millions already.  Their goal is to keep the company running.  Maybe not growing but running.  Great products are their goal.  Not great numbers.  Good for consumers who want their stuff but for shareholders not so great.

 

Doing a 100B plus buyback at this price as Icahn says is a no brainer.  If you owned apple privately and it was you and one partner.  The partner comes to you and says he'll offer you 20% more of his share for 8 times net profit you would be crazy to do it.  Furthermore he tells you he'll finance the buyout for you at just 3%!  This is how incredibly stupid Cook, Oppenheimer and the entire board are regarding this opportunity.

 

That said, perhaps they all see something nobody else does?  A not very bright future for apple. Maybe they feel this is the heyday and bad times await so they do a token buyback to shut people up right now.   What other explanation is there.  They seem intelligent enough to not be able to understand how this is in fact a no brainer.

 

Icahn was almost right about the buyback.  His original amount was too low.  At 500/share apple should go to the finance community, borrow 250B at 3% (comes to 2% net after they expense the interest out) and buy back half the company.  EPS would double to 85/share for 2014.  A PE of just 10 which is all anyone will give them gets them to 850 and we'll exclude all cash or debt since no investor gives credit for either (yeah they are that stupid and so are the fund managers...really).

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