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

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  • Reply 21 of 117
    sog35 said:
    Here are some services Apple needs to add in the next few years:

    1. Streaming movies - like Netflix
    2. LiveTV subs
    3. Home automation/home security
    4. Social platform
    5. Uber-like taxi service (using Apple Cars?)
    6. Search + ads
    7. Expand leasing to iPad, Mac, and Watch
    8. Video sharing like Youtube
    9. Banking, creditcards, 
    Then it would be very difficult for you to manage your stock. The government would trigger anti-trust law and split Apple into several companies. You'd have to deal with a dozen stock...
  • Reply 22 of 117
    Contrary to what has been posted, Apple does not "owe" its stockholders anything.  Stockholders bought the stock with their eyes open and can sell anytime.  The company owes the stockholders a well run company.  The executives owe the company their best efforts to run the company.  The board must monitor and to some extent guide the executives.  If an executive is not performing then the board must replace that person.  People that invest in a company expect a level of competence in the company.  If that level of competence does not appear to exist then the investor is free to divest their holdings.

    Tim Cooks runs Apple.  He does not run the world economy.  He guides the company as it produces products and services that he thinks is best for the company.  No where in his marching orders is "stockholder value" listed as part of his job.  If he executes well then stockholder value should increase but the stock price is part of the world economy that he does not control.

    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.

    No amount of "Monday quarterbacks" is going to alter Apple or any other well run company.
    nolamacguybrucemcibillfastasleep
  • Reply 23 of 117
    nolamacguynolamacguy Posts: 4,758member
    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/
  • Reply 24 of 117
    sog35 said:
    slurpy said:
    Is this what analysts/investors focus on? The next 3 months? Explains why that industry is so fucked, with absolutely no vision and long term agenda.
    And who's fault is that?

    Did Tim Cook give us guidance for revenue for the rest of 2016?
    Did he give us guidance for 2017?
    Did he gives us guidance regarding what the install base will be in 3 years, 5 years, and 10 years?
    Did he give us guidance for what he expects service revenue (the next growth product) to be in the next 3 years?

    NO.

    Or course Wall Street only looks 3 months ahead. Because that's all Tim Cook will talk about in solid terms.  He is too secretive about the future so Wall Street does not give them any credit for the future.

    This goes back to what I've been saying for YEARS.  Tim Cook has no vision. Or he does but does not articulate it clearly to Wall Street. Wall Street sees Apple simply as a hardware company. Yesterday was the first time Apple even tried to hint at services being a massive part of Apple in the future. $30 billion in services is massive for 2015. Yet I don't see a single headline talking about that. Sad.  The reason is he should have been pushing the install base/services/monitize install base theme YEARS AGO. Now it looks like a desperate move.

    Stock has lost $30 billion today. Total lost is over $250 billion since last year.  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.

    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
    nolamacguy
  • Reply 25 of 117
    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?
    nolamacguyneil anderson
  • Reply 26 of 117
    And who's fault is that?
    Did Tim Cook give us guidance for revenue for the rest of 2016?
    Did he give us guidance for 2017?
    Did he gives us guidance regarding what the install base will be in 3 years, 5 years, and 10 years?
    Did he give us guidance for what he expects service revenue (the next growth product) to be in the next 3 years?
    NO.
    And do you understand why he didn't? Because Wall Street doesn't care. They have no interest in a company's long-term prospects if they fear losing a penny in the short term. Though the market likely will reflect a company's true strength long-term, it'll be by accident. The wolves on the Street are all flippers — just with corporations, not houses.
  • Reply 27 of 117
    thomprthompr Posts: 1,511member
    2old4fun said:
    Contrary to what has been posted, Apple does not "owe" its stockholders anything.  Stockholders bought the stock with their eyes open and can sell anytime.  The company owes the stockholders a well run company.  The executives owe the company their best efforts to run the company.  The board must monitor and to some extent guide the executives.  If an executive is not performing then the board must replace that person.  People that invest in a company expect a level of competence in the company.  If that level of competence does not appear to exist then the investor is free to divest their holdings.

    Tim Cooks runs Apple.  He does not run the world economy.  He guides the company as it produces products and services that he thinks is best for the company.  No where in his marching orders is "stockholder value" listed as part of his job.  If he executes well then stockholder value should increase but the stock price is part of the world economy that he does not control.

    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.

    No amount of "Monday quarterbacks" is going to alter Apple or any other well run company.
    Bingo.

    Sog is under the impression that it is even possible for a CEO to successfully defend a stock.  I've been following AAPL since 1997, and I profoundly disagree with Sog.  Sure, the CEO can make some sort of public statement that addresses a Wall Street concern and causes the stock to recover from the negative effects of the concern, but it is only temporary.  It does not stick.  Wall Street is a Poisson process... it has no memory of what has gone before and looks only to the future.  As soon as the next concern is raised, the CEO's comments from the previous concern are swept away and are meaningless.  And there isn't even a residual good will left over in the stock price.

    Trying to manage a stock is like herding cats:  thankless and useless.

    Tim is best off managing the company in the circumstances he's been given, and he's apparently done a fine job of that based on the record setting profit performance Apple has seen over the last couple of years.
    edited January 2016 brucemcfastasleep
  • Reply 28 of 117
    Though Apple had a respectable December quarter...


    I stopped reading at this point.
  • Reply 29 of 117
    thompr said:
    williamh said:

    You sound foolish.  It's hard enough to give good guidance for the next quarter, let alone for a year or next year.  As a slave to guidance, I would expect you to be more sensitive about that. Should Apple have given guidance about this year's iphone installed base in 2006?  You have any idea how stupid that sounds?  Do you think Apple should have provided downward guidance for Q3 2016 LAST YEAR?  Wall Street looks 3 months ahead because that's the next time they get meaningful information.  If Cook gives guidance 3 years ahead they will be wildly off one direction or another.  You think Wall Street likes that?  You are a horrible armchair CEO.
    You are exactly right.   Sog is a horrible armchair CEO, very immature and very impatient.

    If he is so up on what will happen with revenue for the rest of 2016 (or even 2017, ha!) then he should view the undervalued AAPL shares as a buying opportunity. 


    Maybe he's the "D.Trump of AAPL".   :-)
  • Reply 30 of 117
    ibill said:
    In my view, Steve Jobs did no better with managing Wall Street expectations, perhaps not even as good as Tim Cook is doing now.
    That's what I recall as well.

    And back then there were vocal minority screaming for Steve to control the narrative as well. I recall Steve trying that once....once.  But never again.
    palomine
  • Reply 31 of 117
    thomprthompr Posts: 1,511member
    drewys808 said:
    ibill said:
    In my view, Steve Jobs did no better with managing Wall Street expectations, perhaps not even as good as Tim Cook is doing now.
    That's what I recall as well.

    And back then there were vocal minority screaming for Steve to control the narrative as well. I recall Steve trying that once....once.  But never again.
    Yes, this is my memory (watching AAPL since 1997) as well.  

    What these vocal minorities (like Sog) don't understand is that controlling the narrative is impossible.  You could even spend all day every day scouring the stock headlines for the latest FUD and send out press releases to refute it (and that's assuming that the FUD fodder wasn't true!) but you wouldn't end up controlling anything.
  • Reply 32 of 117
    e1618978e1618978 Posts: 6,073member
    A low stock price helps long term holders - Apple can buy back more stock and so can we.
    fastasleep
  • Reply 33 of 117
    thomprthompr Posts: 1,511member
    sog35 said:
    adrayven said:
     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
    What utter bull crap.

    Since late July Apple is down almost 30%
    S&P500 is down 10%
    Nasdaq down 12%
    Dow is down 10%

    Apple's drop is 300% greater than the overall market.
    Entirely because Apple is in unprecedented territory from a profit perspective and so there is a long way to fall.  You and I may know that their situation is different than hardware companies that have been on top before, but enough people on Wall Street are unconvinced that it makes a difference.  Now they are seeing first evidence - or at least they think they are - that the beginning of the end is nigh.  Nothing Cook says is going to change that.  If you think you are right and that they are wrong, then this is a buying opportunity.  Why don't you get that through your skull instead of whining all of the time?
  • Reply 34 of 117
    The more I think about it it seems to me the biggest issue is Wall Street obsessing over Apple maybe no longer being a "growth" stock. Let's say for the sake of argument it's not. So what? In the December quarter Apple sold 96 million devices and that excludes the "other" category. Throw in "other" and you're for sure over 100 million devices. In one freaking quarter. Most companies probably don't sell 100 million of anything in an entire year. Apple reported revenues of $76 billion and profits of $18.4 billion. That $18 billion in profit for ONE QUARTER will probably be more than Facebook's entire revenue for fiscal year 2015. Apple generated almost $28B in cash flow. For comparison that's about $8B more than Microsoft's reported revenue last quarter. Even though until sales were flat to down the install base grew 25%. At some point don't hard numbers have to mean something?
  • Reply 35 of 117
    flaneurflaneur Posts: 4,509member
    sog35 said:

    Apple needs to make their products SEXY again. And sweat the details. There has been a lack of this.  Look at the Watch, the iPhone6, AppleTV4, and iPad Pro.  All 4 are handsome devices but not sexy at all. In fact competing devices like Samsung Galaxy look nicer.
    Add bad vision, bad taste, and numb nuts to sog's growing list of deficiencies.
    dasanman69pscooter63
  • Reply 36 of 117
    flaneur said:
    sog35 said:

    Apple needs to make their products SEXY again. And sweat the details. There has been a lack of this.  Look at the Watch, the iPhone6, AppleTV4, and iPad Pro.  All 4 are handsome devices but not sexy at all. In fact competing devices like Samsung Galaxy look nicer.
    Add bad vision, bad taste, and numb nuts to sog's growing list of deficiencies.
    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. ;)
    flaneur
  • Reply 37 of 117
    thomprthompr Posts: 1,511member
    sog35 said:
    thompr said:
    Entirely because Apple is in unprecedented territory from a profit perspective and so there is a long way to fall.  You and I may know that their situation is different than hardware companies that have been on top before, but enough people on Wall Street are unconvinced that it makes a difference.  Now they are seeing first evidence - or at least they think they are - that the beginning of the end is nigh.  Nothing Cook says is going to change that.  If you think you are right and that they are wrong, then this is a buying opportunity.  Why don't you get that through your skull instead of whining all of the time?
    I responding to the post that said the only reason Apple is down is because the market is down.  Apple is down 300% more than the market.

    Apple has chronically undervalued ever since Tim Cook became CEO. During Steve Jobs reign the PE has been in the 18-25 range most of the time.
    Under Tim Cook the PE has rarely been above 18. We have had many months of sub 12 PE in 2013 and sub 15 in 2015.  Now we are going to get sub 10 after reporting the greatest earnings quarter ever.  That's a reflection on Tim Cook.  Basically the company is worth $300 billion less because Tim Cook is the CEO.
    I understand what you were responding to, and I redirected the point a little bit to this:  the fact that Apple has been undervalued ever since Tim Cook became CEO has more to do with the unprecedented position of success that Tim Cook has brought the company to.  That's right.  When a company shatters the previous record for earnings in a quarter by 20% (or so) the fortune tellers on Wall Street are all going to start looking for signs of the imminent downfall.  (And they think they are seeing them now.)  This unprecedented position of success makes nervous-nellies believe that the success is unsustainable.  They believe that it is only a matter of time before iPhone goes over the hill and starts to shrink either in unit sales or in profitability or both.   Then these people believe iPhone will collapse.  We know better.  Here's my point:  your last sentence is utter BS.  I mean, the value is right, but the cause you are attributing to it is wrong.   This was going to happen regardless of who the CEO is and regardless of how much time they spend trying to "control the narrative".  No other company has reached this level of success before (from an earnings perspective) so to judge Wall Street's reaction to it as a reflection on Cook is monumentally unfair.
    edited January 2016 flaneurfastasleeppalomine
  • Reply 38 of 117
    latifbplatifbp Posts: 544member
    sog35 said:
    I think Apple still has a messaging issue. It's kind of weird seeing this abrupt transition to talking about install base and services. Just a couple months ago it was all about iPad Pro yet iPad Pro was barely mentioned yesterday. That 60 Minutes profile in December didn't focus on software or services at all yet now that's how Tim and Luca want us to view the company. Without an actual services story to tell this seems a bit desperate, sort of like the iPhone story isn't so great right now so let's pivot to services instead. I think it comes across as confusing and maybe a bit dingenuous. Tim and Luca gave no insight on monitization of the user base. They just threw out a supplemental slide with services revenue, most of which is probably App Store and iTunes sales. 

    If Apple is now going to switch the focus to services and monetizing the user base then they need someone better than Eddy Cue to drive that initiative. His organization is the weakest inside Apple IMO and all we'v3 gotten from him is the stupid Beats purchase and a me-zoo streaming music service that tries to do way to much and doesn't end up doing any of it great. Another thing, there's nothing sexy about "monetizing the user base". As a product company first and foremost, how does Apple keep up the excitement level transitioning to a "services" company?
    Good points.

    Apple needs to make their products SEXY again. And sweat the details. There has been a lack of this.  Look at the Watch, the iPhone6, AppleTV4, and iPad Pro.  All 4 are handsome devices but not sexy at all. In fact competing devices like Samsung Galaxy look nicer.

    I agree with the services comment. Cook should have pushed this message YEARS AGO. Now it looks desperate.  That there is a lack of articulating Apple's vision clearly to investors.

    Monetizing user base is not sexy. But its the future.  Its the only way Apple can continue to grow. There are only so many people who can afford to buy a $700 phone every 2 years.  But you can add new services every year. People are already paying for services, but not from Apple. Apple just needs to convience people to use their services. Here are some services Apple needs to add in the next few years:

    1. Streaming movies - like Netflix
    2. LiveTV subs
    3. Home automation/home security
    4. Social platform
    5. Uber-like taxi service (using Apple Cars?)
    6. Search + ads
    7. Expand leasing to iPad, Mac, and Watch
    8. Video sharing like Youtube
    9. Banking, creditcards, 
    I generally agree but I'd also have to counter by saying the new line of MacBooks are extremely sexy. I'm a stalwart MacBook Pro user, but after buying my Space Grey MacBook I'm totally going iMac next time around to replace my Pro and keeping MacBook for on the go. Before people say 'underpowered' or '1.1Ghz' blah blah, I can use Final Cut on this thing for one project at a time. I absolutely love the thing.
  • Reply 39 of 117
    jdnc123jdnc123 Posts: 233member
    adrayven said:
    sog35 said:
    And who's fault is that?

    Did Tim Cook give us guidance for revenue for the rest of 2016?
    Did he give us guidance for 2017?
    Did he gives us guidance regarding what the install base will be in 3 years, 5 years, and 10 years?
    Did he give us guidance for what he expects service revenue (the next growth product) to be in the next 3 years?

    NO.

    Or course Wall Street only looks 3 months ahead. Because that's all Tim Cook will talk about in solid terms.  He is too secretive about the future so Wall Street does not give them any credit for the future.

    This goes back to what I've been saying for YEARS.  Tim Cook has no vision. Or he does but does not articulate it clearly to Wall Street. Wall Street sees Apple simply as a hardware company. Yesterday was the first time Apple even tried to hint at services being a massive part of Apple in the future. $30 billion in services is massive for 2015. Yet I don't see a single headline talking about that. Sad.  The reason is he should have been pushing the install base/services/monitize install base theme YEARS AGO. Now it looks like a desperate move.

    Stock has lost $30 billion today. Total lost is over $250 billion since last year.  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.

    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.
    ac1234anantksundarampalomine
  • Reply 40 of 117
    thomprthompr Posts: 1,511member
    flaneur said:
    Add bad vision, bad taste, and numb nuts to sog's growing list of deficiencies.
    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...
    satchmopscooter63
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