Wall Street adjusts Apple expectations after Tim Cook 'rips the Band-Aid off'

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  • Reply 41 of 117
    jdnc123jdnc123 Posts: 233member

    Every time Apple goes through a bit of a downturn people panic and come up with crazy ideas. Back in 2013 one analyst started floating rumors about the board looking to replace Tim Cook. Now you have analysts saying Apple to spend its cash to buy growth. Right, because large acquisitions have turned out great for other companies in the past. Then you get the clowns that say Wall Street loves Google and Facebook so Apple needs to get into ads and social networking. It's all nonsense. Maybe Apple isn't a growth story so much anymore. So what? Who else is generating the kind of revenue, profits and cash flow that Apple is? No one. Sure Amazon can grow their top line 20% but they have next to no profit to show for it and there's zero indication meaningful profits will be flowing anytime soon. Has there ever been a company receiving so much doom and gloom after reporting 18 BILLION in profit for ONE QUARTER? Most Fortune 500 companies don't post that for an entire year much less one quarter yet here we are questioning whether we're seeing peak Apple. Seriously?
    Agree with all you said, but the reality is the stock trades at a lower multiple than IBM, a company who has had umpteen straight quarters of revenue declines (I'm short it).  Apple is viewed as in worse shape than IBM by the market.  That is a messaging problem.  The secrecy is read to mean Cook has no vision.  He can articulate a vision of the future without discussing trade secrets or specific product development.
    palomine
  • Reply 42 of 117
    I do think this will put pressure on Tim -- or the Apple Board-of-Directors -- to take a more active role in protecting shareholder value.

    I listened to the call, am a supporter of Tim, and think that Apple is doing great things in many aspects (R&D, Sales, Profit).  And yet... any public company has an important reponsibility to protect its owners (i.e., shareholders), and that has fallen down recently.  Without meaning to spark the vitriol that often comes on this site, I do think "protecting shareholder value" is a legitimate topic..
    just as long as it isn't managing to "maximize shareholder value", which is a dumb idea. 

    http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/
    Wow, that was a surprisingly smart and insightful article. It should be required reading for anyone in business, investing, or participating in this discussion. Thanks for posting. 
    palomine
  • Reply 43 of 117
    jdnc123 said:

    Every time Apple goes through a bit of a downturn people panic and come up with crazy ideas. Back in 2013 one analyst started floating rumors about the board looking to replace Tim Cook. Now you have analysts saying Apple to spend its cash to buy growth. Right, because large acquisitions have turned out great for other companies in the past. Then you get the clowns that say Wall Street loves Google and Facebook so Apple needs to get into ads and social networking. It's all nonsense. Maybe Apple isn't a growth story so much anymore. So what? Who else is generating the kind of revenue, profits and cash flow that Apple is? No one. Sure Amazon can grow their top line 20% but they have next to no profit to show for it and there's zero indication meaningful profits will be flowing anytime soon. Has there ever been a company receiving so much doom and gloom after reporting 18 BILLION in profit for ONE QUARTER? Most Fortune 500 companies don't post that for an entire year much less one quarter yet here we are questioning whether we're seeing peak Apple. Seriously?
    Agree with all you said, but the reality is the stock trades at a lower multiple than IBM, a company who has had umpteen straight quarters of revenue declines (I'm short it).  Apple is viewed as in worse shape than IBM by the market.  That is a messaging problem.  The secrecy is read to mean Cook has no vision.  He can articulate a vision of the future without discussing trade secrets or specific product development.
    I agree 100% that Apple has a messaging problem. But that doesn't meab no one on the executive team has vision. It's just some people do a better job of articulating it than others. Or maybe Steve Jobs was fond of less is more because the less you talk the less chance there is for causing confusion.
    edited January 2016
  • Reply 44 of 117
    thomprthompr Posts: 1,510member
    jdnc123 said:
    adrayven said:
    Steve Jobs did the exact same thing, worse actually. He wouldn't be doing by-backs, or provide any Dividend.. Tim Cook is doing fine.. He doesn't need vision; thats what Jonny Ive and team are for; thats their job. Any stock lost over past weeks is hardly because of Tim Cook. Most of it is the market as a whole has lost it's ass in Oil and China, so everything is moving to bonds and gold. Over 17% drop as a market whole (dragging Apple with it).. Of course, now you'll say the entire markets drop is all Tim's fault too. Grow up .. lol
    Honest question.  How do you think Steve Jobs would feel about the market saying Google is a better and thus more valuable company as it is today.  Google has an enterprise value of $420 billion versus Apple at $372 billion.  Google is about to pass Apple in market cap also.  The stock is lower than it was in 2012 due to massive multiple compression, which has happened because the Street saw the growth slowing, apparently even before the CEO did.  Google has increased by $200 billion or so in value since 2012, MIcrosoft by $150 billion, Netflix by $40 billion, Amazon by $175 billion, all while Apple lost $130 billion of total enterprise value.  The idea that this is just 'the market' is complete and utter garbage.  Its an Apple problem, not a market problem.  I'm a lover of Apple products and owner of the stock, but I can't convince myself that the other companies I mentioned havent been making bolder moves than Apple under Tim Cook.

    I personally think Jobs is rolling in his grave because Cook has allowed Google to surpass Apple in value.  Given how much he hated them, he has to be.
    Wall Street values a "hit hardware" company differently from a services and/or software company.  It believes that fortunes can turn faster in the hardware world, and that is actually true.  They don't understand that Apple is somewhat different than your typical Blackberry, Palm, Nokia, etc.  Cook hasn't caused this.  It was inevitable.  If anything, Apple's incredible success with iPhone 6 set them up for scrutiny as to whether we have reached "peak iPhone", and now some folks are predicting steady decline into commodity status.

    I am predicting that if iPhone 7 comes out and is truly waterproof (not just water-resistant), then that will be a killer feature that will drive massive upgrades.  Look for those rumors to get louder in April, May, June, etc.  And AAPL stock will make a comeback then.  Meanwhile, buy the shares at a discount.
    flaneurfastasleep
  • Reply 45 of 117
    brucemcbrucemc Posts: 1,509member
    thompr said:
    He's completely jumped the shark now. But at he's no longer calling people cheap bastards that should go Ansroid for complaining about 16GB devices. ;)
    Ha.  Jumped the shark.  Yes he has.  And other than the Fonz doing that deed, Sog's behavior reminds me of another Happy Day's scene with Fonzie:  the one in which he can't bring himself to utter the words "I was Wrong".  Sog can never utter those words.  He predicted AAPL stock would be at 150 by Christmas, and when that didn't happen he was not wrong.  No.  He was right, and it's all Tim Cook's fault that the share price is not where it's "supposed to be".  Thus, Sog feels justified in continuing to post on this board even though he stated he wouldn't.  After all, he wasn't wr... wr... wr...
    Public Service Announcement:  If you want to bring a bit of civility and reduce the complete & utter repetitive noise on the forums, I highly recommend everyone put sog35 on the "ignore" list.  I don't say it lightly, as I understand that some will take the "everyone's opinion is valid" point, but at some point enough is enough.  It is complete repetition and nonsense now.  His position flip-flops more than a baby seal.  I did this a few weeks ago & it definitely helps, but the more that do it the better for all.


    jackansi
  • Reply 46 of 117
    jdnc123 said:
    adrayven said:
    Steve Jobs did the exact same thing, worse actually. He wouldn't be doing by-backs, or provide any Dividend.. Tim Cook is doing fine.. He doesn't need vision; thats what Jonny Ive and team are for; thats their job. Any stock lost over past weeks is hardly because of Tim Cook. Most of it is the market as a whole has lost it's ass in Oil and China, so everything is moving to bonds and gold. Over 17% drop as a market whole (dragging Apple with it).. Of course, now you'll say the entire markets drop is all Tim's fault too. Grow up .. lol
    Honest question.  How do you think Steve Jobs would feel about the market saying Google is a better and thus more valuable company as it is today.  Google has an enterprise value of $420 billion versus Apple at $372 billion.  Google is about to pass Apple in market cap also.  The stock is lower than it was in 2012 due to massive multiple compression, which has happened because the Street saw the growth slowing, apparently even before the CEO did.  Google has increased by $200 billion or so in value since 2012, MIcrosoft by $150 billion, Netflix by $40 billion, Amazon by $175 billion, all while Apple lost $130 billion of total enterprise value.  The idea that this is just 'the market' is complete and utter garbage.  Its an Apple problem, not a market problem.  I'm a lover of Apple products and owner of the stock, but I can't convince myself that the other companies I mentioned havent been making bolder moves than Apple under Tim Cook.

    I personally think Jobs is rolling in his grave because Cook has allowed Google to surpass Apple in value.  Given how much he hated them, he has to be.
    Why are people here so obsessed about Google?
  • Reply 47 of 117
    flaneurflaneur Posts: 4,506member
    jdnc123 said:
    adrayven said:
    Steve Jobs did the exact same thing, worse actually. He wouldn't be doing by-backs, or provide any Dividend.. Tim Cook is doing fine.. He doesn't need vision; thats what Jonny Ive and team are for; thats their job. Any stock lost over past weeks is hardly because of Tim Cook. Most of it is the market as a whole has lost it's ass in Oil and China, so everything is moving to bonds and gold. Over 17% drop as a market whole (dragging Apple with it).. Of course, now you'll say the entire markets drop is all Tim's fault too. Grow up .. lol
    Honest question.  How do you think Steve Jobs would feel about the market saying Google is a better and thus more valuable company as it is today.  Google has an enterprise value of $420 billion versus Apple at $372 billion.  Google is about to pass Apple in market cap also.  The stock is lower than it was in 2012 due to massive multiple compression, which has happened because the Street saw the growth slowing, apparently even before the CEO did.  Google has increased by $200 billion or so in value since 2012, MIcrosoft by $150 billion, Netflix by $40 billion, Amazon by $175 billion, all while Apple lost $130 billion of total enterprise value.  The idea that this is just 'the market' is complete and utter garbage.  Its an Apple problem, not a market problem.  I'm a lover of Apple products and owner of the stock, but I can't convince myself that the other companies I mentioned havent been making bolder moves than Apple under Tim Cook.

    I personally think Jobs is rolling in his grave because Cook has allowed Google to surpass Apple in value.  Given how much he hated them, he has to be. 
    If you're going to commit the big taboo blunder and try to speak for Steve Jobs, at least give him credit for being smarter than Wall Street. He would be laughing at their stupidity, cowardice, PC-centric inability to understand Apple, and lack of any long-range vision, just as we are, at least the non-soggists among us.

  • Reply 48 of 117
    On the other end of the journalism spectrum, I just read a Reuters article that said, "Tepid demand for the latest iPhones...led Apple to sell 74.8 million iPhones in the first quarter."

    Sorry, but how can any sane person describe the sale of 74.8 million pricey top-tier phones as a result of "tepid" demand? This is the kind of idiotic wording that frames peoples' expectations and helps explain the absurdly low stock valuation. 
    jax44palomine
  • Reply 49 of 117
    I have not read the prior comments, and look forward to doing so later today, but my 2¢ is that Apple has currently no narrative or vision to offer the market, and the market is making up its own. As it always does.

    Cook just does not appear to be comfortable creating, managing, massaging, reinforcing such a narrative, and I think the Board is utterly useless/absent at this point (it's a bunch of mediocre people and has-beens anyway).

    I find it particularly puzzling, given how passionate Tim Cook can be on matters that concern him personally. Why can't he bring the same passion to addressing his shareholders' genuine concerns? (And I am not talking about -- I could care less about -- the fly-by-nights and the drive-by shareholders here). Weird....
    rogifan_old
  • Reply 50 of 117
    tmaytmay Posts: 3,464member
    I've figured it out.

    Wall Street doesn't hate Apple at all.

    Wall Street only wants to punish sog; drive him to sell at a loss.

    Apple is just inconveniently in the way, 

    That's is all.
    dasanman69palominejackansi
  • Reply 51 of 117
    k2kwk2kw Posts: 1,654member
    sog35 said:

    Avoid Apple Stock While Tim Cook Is in Charge (AAPL)

    http://investorplace.com/2016/01/apple-stock-cook-must-go/#.VqkS3PkrK2w

    this is a good read by this guy.




    sog:
    Who is your candidate for Appl ceo?
  • Reply 52 of 117
    volcanvolcan Posts: 1,766member
    2old4fun said:

    Investor decide what they are willing to pay for the privilege of "owning" a small part of the company.  The investor decides to buy or sell based on their own criteria.

    The thing is that shareholders do NOT "own" a small part of the company. They own paper with words printed on it.

    People buy shares to either get a dividend or in the hope that some other fool will pay them more for that piece of paper than they bought it for. The only way owning shares entitles you to part of the company is if the company is private. Otherwise, you are just providing financing for the company with no guaranteed contractual interest payments. Buying publicly traded shares is just gambling and has very little to do with the performance of a company.

    Often there is a disconnect between the value of a company and the share price. In some cases a loose association, but in Apple's case, a complete and total disconnect of the highest order. 
    edited January 2016
  • Reply 53 of 117
    foggyhillfoggyhill Posts: 4,767member
    jdnc123 said:
    adrayven said:
    Steve Jobs did the exact same thing, worse actually. He wouldn't be doing by-backs, or provide any Dividend.. Tim Cook is doing fine.. He doesn't need vision; thats what Jonny Ive and team are for; thats their job. Any stock lost over past weeks is hardly because of Tim Cook. Most of it is the market as a whole has lost it's ass in Oil and China, so everything is moving to bonds and gold. Over 17% drop as a market whole (dragging Apple with it).. Of course, now you'll say the entire markets drop is all Tim's fault too. Grow up .. lol
    Honest question.  How do you think Steve Jobs would feel about the market saying Google is a better and thus more valuable company as it is today.  Google has an enterprise value of $420 billion versus Apple at $372 billion.  Google is about to pass Apple in market cap also.  The stock is lower than it was in 2012 due to massive multiple compression, which has happened because the Street saw the growth slowing, apparently even before the CEO did.  Google has increased by $200 billion or so in value since 2012, MIcrosoft by $150 billion, Netflix by $40 billion, Amazon by $175 billion, all while Apple lost $130 billion of total enterprise value.  The idea that this is just 'the market' is complete and utter garbage.  Its an Apple problem, not a market problem.  I'm a lover of Apple products and owner of the stock, but I can't convince myself that the other companies I mentioned havent been making bolder moves than Apple under Tim Cook.

    I personally think Jobs is rolling in his grave because Cook has allowed Google to surpass Apple in value.  Given how much he hated them, he has to be.
    So, did those gurus on wall street "know" about that future slowdown (sic) in 2012....when Apple was valued as low as now despite the fact that there was 200B in profits coming up within 4 years. Why didn't these doufus idiots reflect that in the god damn price like they's supposed to.

    By your measure, a company that makes:
    40B 50B 100B 101B 99B 103B 106B  in profits
     should have a lower stock price than a company making
    30B 35B   40B   45B 50B   55B 60B 65B profits over the same period....
    Hey, the second company is growing!!

    That's how Wall Street works.
    Even worse, if the same company had a growth profile like the second one, instead of the first, its stock price would be higher!

    IF I present things like that, people would say, well that's ridiculous... The first company would had 10+15+60+56B+44B+43B+41B=269B more money in the bank that the successful second company! than the second one and would still likely make money than the second for another 5-6 years... so, another 100B more at least even it didn't grow.

    Well, that's how it is in gambling land that is the stock market; were shuffling paper barely has to make sense as long as someone is ready to buy them.

    Price of stock is supposed to reflect present value of future profit, are you telling me that's what Wall street did 3 years ago; are you for god damn real?
    Please start making sense in your argument.

    Wall street shits out a number based who the knows what. Google would need to quadruple its profit within 3-4 years for its valuation to make sense; well, good luck on that with Facebook breathing down their necks and their moonshots all using up money instead of generating it.
    edited January 2016
  • Reply 54 of 117
    crowleycrowley Posts: 5,739member
    Price of stock is supposed to reflect the average of how traders value the stock. Nothing more, nothing less.
    volcantechlovercnocbuithompr
  • Reply 55 of 117
    It's funny, I was just reading about the myth of "peak iPhone" on this very site just a few days ago.

    http://appleinsider.com/articles/16/01/14/apple-a9-chip-fab-tsmc-reports-record-earnings-casts-doubt-on-peak-iphone
    edited January 2016
  • Reply 56 of 117
    jason98jason98 Posts: 763member
    sog35 said:
     We could easily see $80 stock price in a few days. All because Apple is run by a CEO who has no idea how to control the narrative of the company.

    IMO the only mistake Tim is making is wasting company's cash on dividends. Instead he should have let the price go down as much as Wall Street wants and then just take the company private with all its cash reserves, or at least buy back as much as possible.
  • Reply 57 of 117
    brucemcbrucemc Posts: 1,509member

    jdnc123 said:

    Every time Apple goes through a bit of a downturn people panic and come up with crazy ideas. Back in 2013 one analyst started floating rumors about the board looking to replace Tim Cook. Now you have analysts saying Apple to spend its cash to buy growth. Right, because large acquisitions have turned out great for other companies in the past. Then you get the clowns that say Wall Street loves Google and Facebook so Apple needs to get into ads and social networking. It's all nonsense. Maybe Apple isn't a growth story so much anymore. So what? Who else is generating the kind of revenue, profits and cash flow that Apple is? No one. Sure Amazon can grow their top line 20% but they have next to no profit to show for it and there's zero indication meaningful profits will be flowing anytime soon. Has there ever been a company receiving so much doom and gloom after reporting 18 BILLION in profit for ONE QUARTER? Most Fortune 500 companies don't post that for an entire year much less one quarter yet here we are questioning whether we're seeing peak Apple. Seriously?
    Agree with all you said, but the reality is the stock trades at a lower multiple than IBM, a company who has had umpteen straight quarters of revenue declines (I'm short it).  Apple is viewed as in worse shape than IBM by the market.  That is a messaging problem.  The secrecy is read to mean Cook has no vision.  He can articulate a vision of the future without discussing trade secrets or specific product development.
    I do agree that Apple could communicate their vision better (how Apple products & services will tie ever better together with iCloud, new device areas, etc), but I am not convinced that it will significantly affect the stock in the short term.  Executing on that vision (even if vision is only shared internally) is far more important in the long run for increasing valuation.

    Perhaps just communicating better about how the different Apple devices & services work together "today" though would be just as helpful.
    palomine
  • Reply 58 of 117
    foggyhillfoggyhill Posts: 4,767member
    I have not read the prior comments, and look forward to doing so later today, but my 2¢ is that Apple has currently no narrative or vision to offer the market, and the market is making up its own. As it always does.

    Cook just does not appear to be comfortable creating, managing, massaging, reinforcing such a narrative, and I think the Board is utterly useless/absent at this point (it's a bunch of mediocre people and has-beens anyway).

    I find it particularly puzzling, given how passionate Tim Cook can be on matters that concern him personally. Why can't he bring the same passion to addressing his shareholders' genuine concerns? (And I am not talking about -- I could care less about -- the fly-by-nights and the drive-by shareholders here). Weird....
    So, you're mainly worried about communication. I do think that they may need a better communication from Cook (not sure it is possible), but I don't think anyone right now would be doing better in other sphere of what a CEO needs to do. That's the problem; few people, not even Musk, had Jobs ability to inspire, to make you believe you know what the future will be. Maybe have someone promoted internally that's the best at this; there must be 1-2 in Apple's upper sphere.

    Operations people and most engineers are hopeless communicators, especially when it comes to a lofty future.

    Scientists/Inventors are much better; they have a twinkle in their eyes that cannot be reproduced.

    Google make due for no real good communicators by essentially publicizing their R&D as it goes and hyper-diversifying,
    Amazon does it by pushing so hard on revenue development that they always use that as an excuse for not having decent profits.

    Apple will generate 200B profits in the next 4 years even if they coast, adding it to their current haul, they are in a better position than any company out there to weather macro economic problems and go do whatever they want.

    I do think it's a bit unfair that Cook is put in a position where he can't really win. Last year's gangbuster results (that one, especially analyst expected made it so) made it very hard to duplicate the following year, especially with the currency rise.

    Jobs had a lot less expectations put on him, the Ipod took 3-4 years to really be a hit and even the Iphone took 2 years.
    It's only when Jobs came back to Apple that he had this level of expectations put on him; and at that point, just surviving was a success.

    I don't think even Jobs could manage this kind of massive expectations, though Wall Street would likely prefer his aspirational messaging, even if it were pure BS, than the current crew of not so adept communicator of straight reality.
    flaneurpalomine
  • Reply 59 of 117
    foggyhillfoggyhill Posts: 4,767member
    tmay said:
    I've figured it out.

    Wall Street doesn't hate Apple at all.

    Wall Street only wants to punish sog; drive him to sell at a loss.

    Apple is just inconveniently in the way, 

    That's is all.
    I think I'm going to switch my revulsion of Wall Street to love if that's their main motivator ;-).
    brucemcflaneur
  • Reply 60 of 117
    jdnc123jdnc123 Posts: 233member
    foggyhill said:
    jdnc123 said:
    Honest question.  How do you think Steve Jobs would feel about the market saying Google is a better and thus more valuable company as it is today.  Google has an enterprise value of $420 billion versus Apple at $372 billion.  Google is about to pass Apple in market cap also.  The stock is lower than it was in 2012 due to massive multiple compression, which has happened because the Street saw the growth slowing, apparently even before the CEO did.  Google has increased by $200 billion or so in value since 2012, MIcrosoft by $150 billion, Netflix by $40 billion, Amazon by $175 billion, all while Apple lost $130 billion of total enterprise value.  The idea that this is just 'the market' is complete and utter garbage.  Its an Apple problem, not a market problem.  I'm a lover of Apple products and owner of the stock, but I can't convince myself that the other companies I mentioned havent been making bolder moves than Apple under Tim Cook.

    I personally think Jobs is rolling in his grave because Cook has allowed Google to surpass Apple in value.  Given how much he hated them, he has to be.
    So, did fracking wall street "know" about the slowdown (sic).... After Apple fucking grew it's profit 80% since 2012, when Apple was valued as low as now.
    If they fucking anticipated the slowdown .... Right.... Why didn't those moron anticipate 200B in profits and reflect it the god damn price like they're supposed to.

    Price of stock is supposed to reflect present value of future profit, are you telling me that's what Wall street did 3 years ago; are you for god damn real?
    Please start making sense in your argument.

    Wall street shits out a number based who the knows what. Google would need to quadruple its profit within 3-4 years for its valuation to make sense; well, good luck on that with Facebook breathing down their necks and their moonshots all using up money instead of generating it.
    Profits increased and multiples decreased.  It happens all the time, not just with Apple.  Its a rationale response to a slowing growth trajectory.  

    Apple is currently on a negative growth trajectory.  They have more cash than any company in the history of the world and can't grow.  That's the main problem.  All the resources anyone can imagine and they can't muster up an idea to show growth from here.  It's reality until they prove the Street wrong and I got no sense from the conf call that they are prepared to change that view this year.  Frankly, it sounded pathetic and like panic.  Last quarter Cook says no problems in China and now this quarter they are experiencing a slowdown like they've never seen before.  Good fcking hell, everyone and their mother has been saying China was slowing down for a year and yet Cook got caught by surprise by it.  Maybe he didn't see it as early, but given all the datapoints out there that it was slowing he sure as heck could have made some contingencies versus just dismissing only 3 months ago.

    I worry about employee retention.  Anyone who joined the company in the last three years is working for salary only and not stock comp as the options aren't increasing in value like they did in the past. Much easier to argue to yourself that you can kill it at a smaller startup (or at Google based on recent stock performance) if you are a talented engineer by NOT going to Apple.
    palomine
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