May 24, 2013 - 01:45 PM EDT — AAPL: 443.33 (+1.19, +0.27%) | NASDAQ: 3498.965 (+33.722, +0.97%)

Clearly, something is wrong with Apple’s stock

Tuesday, January 15, 2013 · 4:29 pm · 38 Comments

“Action in Apple stock suggests that shares are headed lower in the near-term, Rosecliff Capital’s Mike Murphy said Tuesday on CNBC,” Bruno J. Navarro reports for CNBC. “‘I really thought you’d see a rally on the fundamentals,’ he said. ‘The fact that the stock is down here, it tells you every single time it rallies, it gets hit with a wave of selling and going lower.’”

“On “Fast Money,” Murphy said that he added to his long call position and expected the stock to climb after it reports earnings on Jan. 22,” Navarro reports. “Joe Terranova of Virtus Investment Partners admitted that calling Apple stock “a generational buy” on Nov. 16 was incorrect. ‘Clearly, something is wrong with the stock of Apple – not the fundamentals – the stock of Apple, and where the support is, I don’t think anyone truly knows,’ he said.”

Watch the full video here.

Categories: News

Tags: aapl, Apple Inc., Apple stock, finance, investing, Joe Terranova, Mike Murphy, Rosecliff Capital, stock market, Virtus Investment Partners

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Comment Feed

38 Comments

Macintosh Sauce

Tuesday, January 15, 2013 - 4:35 pm · Reply

Clearly, the financial ANALysts are manipulating Apple’s stock.
- MacFreek
  
  Tuesday, January 15, 2013 - 6:54 pm · Reply
  
  Apple stock is fine, a mere correction. Your portfolio; however, is jacked.
  - GM
    
    Wednesday, January 16, 2013 - 2:24 am · Reply
    
    Objective non fanboy observation appreciated. Conspiracy theories and pity party not missed. A clean cool breath of intelligent fresh air.
    - twimoon1
      
      Wednesday, January 16, 2013 - 8:38 am · Reply
      
      Rewrite post
      In Haiku form your words have
      more impact
      - GM
        
        Wednesday, January 16, 2013 - 11:07 am · Reply
        
        How about Klingon?
breeze

Tuesday, January 15, 2013 - 4:42 pm · Reply

Petition the SEC
sdfg

Tuesday, January 15, 2013 - 4:42 pm · Reply

There is nothing wrong with Apple’s stock. It’s humans that have a problem. They’re delusional. Scared. Weird. Wayward.

The stock’s volatility is simply a manifestation of the human condition. There’s nothing you can do. If you don’t like it, don’t buy into the stock market.

Why are people worried? One, the iPhone parts demand thing. The other thing is that I think people are much less confident without Steve Jobs. This latter can’t be understated.
- Laughing_Boy48
  
  Tuesday, January 15, 2013 - 11:15 pm · Reply
  
  So, why isn’t Amazon being affected by anything? Superhigh P/E, razor-thin profits, Bezos spending money as fast as it comes in. The stock is stronger than ever Why should Amazon be worth more than half the share price of Apple? I’m sure they’re not selling nearly the amount of Kindle Fires they thought they would. Nobody even seems to care. Nobody is tracking Amazon Kindle Fir components or supply.
  
  I hardly ever see analysts yelling Amazon is in a bubble. Shouldn’t investors be frightened about the solidity of Amazon. Why is it always Apple that frightens investors when Apple is earning plenty of revenue and have a huge cash reserve?
  - twimoon1
    
    Wednesday, January 16, 2013 - 8:42 am · Reply
    
    Put another way, if Apple stopped making a profit, how long would the company be able to run before it had to be liquidated? Amazon?
    
    I would say Apple would have a few years, Amazon maybe 6 or 7 months.
BoC

Tuesday, January 15, 2013 - 4:47 pm · Reply

Since the institutional investors hold heavy sway, they must be doing…what?
- thethirdshoe
  
  Tuesday, January 15, 2013 - 5:51 pm · Reply
  
  Making more money than we are…
New Stock Owner

Tuesday, January 15, 2013 - 4:52 pm · Reply

It’s because I finally bought some Apple stock a couple months ago. Nothing about the company fundamentals has changed recently. The only explanation I can find for why it’s not bouncing back from this dip quickly like it has with every other dip in last couple years is because now I have stake in it.
- ApplePi
  
  Tuesday, January 15, 2013 - 5:21 pm · Reply
  
  Hopefully you didn’t do a large part of your portfolio.
  
  AAPL should always be a small portion. Don’t put all your eggs in one basket. Especially when wealthy institutional types are carrying the basket.
- DustyMac
  
  Wednesday, January 16, 2013 - 9:33 am · Reply
  
  You and me both. I bought AAPL just in time to watch it drop like a stone. I have the reverse Midas touch when it comes to investing.
Darkness

Tuesday, January 15, 2013 - 5:11 pm · Reply

It’s the quarterly cocking of the slingshot. Push the price down before the earnings report, then let it fly after they blow past all estimates. The market is a crooked game…
Paul

Tuesday, January 15, 2013 - 5:11 pm · Reply

Herd mentality
vsp

Tuesday, January 15, 2013 - 5:26 pm · Reply

Apple can do one of these things:
1) take it private or
2) decrease the number of shares in the market by a reverse split, a 1 for 2 exercise.

Option 1 is very drastic and also very expensive. It could wipe out the entire cash hoard of Apple and most possibly Apple would have to borrow money from Wall Street’s banks for this purpose.

Option 2 would preserve Apple’s cash hoard and would also limit the damage of Wall Street’s perfidy and allow Apple to have greater control of its destiny. Let’s see how much further Wall Street would drive down the share price. Buybacks would be okay if the shares are low enough to do so. After Apple feels that it is in control of its own shares would it then slowly increase the number of shares on the market, not to the former level, by rewarding shareholders with bonus issues, like 1 for every 100.

Apple should never issue any option stocks because it would just encourage gambling and not investing. Also Apple should never split its shares and create more papers in the market. Creating more papers would not solve Apple’s present stock situation but would exacerbate it further. Apple has enough money in its hands and does not need to raise any funds from Wall Street for expansion. So creating more shares just to raise funds is stupid for a company like Apple which is flushed with cash. This is the only option for companies that do no have the cash for expansion.

Increasing the dividend payment would be good if the number of shares on the market is limited.
- Jim
  
  Tuesday, January 15, 2013 - 5:44 pm · Reply
  
  If I were in Tim Cook’s shoes my assessment would be this: Clearly making tremendous revenue and profits does not positively impact the value I’m returning to share holders. Therefore, the best way I can return value to shareholders is via an instrument I can control: Paying dividends.
  
  If Tim Cook starts getting overly concerned with the stock price, then he’s practicing a religion Scully, Spindler and Ameilio retired from.
  
  If I were in the shoes of Wall Street I would assess things this way: When Tim Cook pays more attention to giving profits back to his shareholders than he gives to us in mergers and acquisitions fees, there is no reward for us supporting him with positive stock outlooks.
  - breeze
    
    Tuesday, January 15, 2013 - 6:23 pm · Reply
    
    Jobs knew that Tim Cook was a supply chain and production master and knew exactly what he would with those attributes as when he took over. Shut up and watch, is a good approach for the rest of us.
- CraigNotGreg
  
  Tuesday, January 15, 2013 - 6:31 pm · Reply
  
  What on earth would a reverse split accomplish? It’s true that it would reduce the number of outstanding shares by half, but it would also double the value of each share. Are you confusing a reverse split with a stock buyback?
3l3c7ro

Tuesday, January 15, 2013 - 6:22 pm · Reply

It is simple, from my point of view. AAPL is misunderstood and the stock suffers a bit. The real story is that institutions and traders are all riding these waves as more retail public buys in and hopes for the rally. If a small rally develops, traders start selling until the retail public gets scared off. There is a lot of money to be made shorting the stock when it is up and going long when it is down. In the end, the retail public will panic and sell to the institutions who will clean up.
nikcomp

Tuesday, January 15, 2013 - 6:30 pm · Reply

What we are seeing is investor’s dissapointment in what was released by Apple last year. Remember everyone Microsoft has “made” money for years but people kept saying if all MS can do is sell Office and Windows someday they will begin to fall. We are seeing that now with PC shipments. Apple is at its 3 year mark. That is a notable time window because they are do for a “revolution.” Apple gets the money because they wow and exceed what we expect. Right now Apple is only meeting what is expected. The market drop is precisely for that. Remember Apple’s growth is way beyond the “core” Apple people like many of us. Like any music band “hits” are needed to keep the excitement. Its been 3 years. Time for a hit.
- blaargh
  
  Tuesday, January 15, 2013 - 9:11 pm · Reply
  
  Time for another bong hit for you. Apple has *NEVER* reinvented themselves every 3 years.
- fscuttle
  
  Wednesday, January 16, 2013 - 2:27 am · Reply
  
  And Microsoft trades at 14.7 x earnings.
taosbob

Tuesday, January 15, 2013 - 6:55 pm · Reply

What is “wrong” with AAPL? It’s been pummeled for months daily in media outlets around the world in a coordinated PR campaign likely funded its chief business rival. Whether this campaign also included a parallel financial attack I cannot say for sure, but believe it did. This attack appears to have been initiated not long after the trial verdict was announced and grew in intensity after the December hearing. But you will never read of such speculations in any of the media outlets captured by its money.
- Paul
  
  Tuesday, January 15, 2013 - 7:53 pm · Reply
  
  YES. That is right on the button. The PR campaign is not from just one rival though. Many people have a stake in the WINTEL industry and the Android industry.
  
  The funniest one is the PR campaign by BUZZ marketing. They are going out saying that teens think Apple is so yesterday and MS Surface is the new “cool”. As if this was ONLY a cool factor “thing” all by itself. The real Apple phenomena is that the products are First Class, High Quality, and a Great Experience as well as Cool Looking. Buzz thinks that if they can spread their lies they can manipulate the young and eventually CREATE a market for the crap Surface Tablets. This is financed by MS.
  
  Similar campaigns are financed by Samdung, Gurgle and also Intel is acting suspicious.
  
  Simple fact is that Apple threatens a lot of companies….Dell, HP, Intel, MS, Samdung, Google, Amazon, RIMM, Nokia, …the list goes on! HMV is going away as we just heard. Eventually the carriers will too be threatened in the long run. The Wall Street and most of the media are in bed together and these shysters don’t want to see these companies go away. So they will scratch each others back in order to profit from the turmoil. Their interest is to keep these companies around and they will continue to pull for them …..ESPECIALLY if these same companies buy them as a “service”.
  - hannahjs
    
    Tuesday, January 15, 2013 - 9:27 pm · Reply
    
    I think you put your finger on it.
    
    These are desperate times for the opposition, which is entire industries, and klaxons are sounding in every board room.
    
    The early skirmishers were brushed aside like gnats.
    
    The planted stories to discredit Apple are beginning to resemble a robbery bungled by fools.
    
    Marketing ploys don’t work when the products suck in the first place; and fashion emerges from a complex cultural dynamic—it can’t be forced on young people, who are far less stupid than advertisers believe.
    
    Hip is never defined by corporate drones.
    
    Desperation is the name of the game when journalists are pressured to spread negative stories about Apple’s market value, in blatant contradiction to its capital accumulation, profit share, aggressive expansion, retail ownage, customer retention, and paradigm-defining vertical integration.
    
    Come January 23, the piranha will again be forced to retreat to the sludge and STFU.
tz

Tuesday, January 15, 2013 - 7:16 pm · Reply

Greed afflicted minds, pure and simple.
Shadowself

Tuesday, January 15, 2013 - 7:20 pm · Reply

So Apple is trading at significantly less than three times BOOK VALUE. Hell, it’s probably trading at just over three times CASH. (I’m expecting cash to go up again in the next earnings report.)

Historically, medium to large companies are only traded at so low a value when investors are sure there’s going to be a complete crash in the company. It also happens sometimes when the company is a prospect for a take over. Neither of these is the case here!

Yes, there is something wrong with Apple’s stock price. It is clearly manipulation by the institutional investors in concert with the analysts. If only there were a smoking gun to prove it!
Songhil

Tuesday, January 15, 2013 - 7:33 pm · Reply

The news is designed to shake the monkeys out of the trees (the small non-institutional investor). I would guess somewhere around 470 is where the bulk of the institutional dough is. From there, the news on Apple will then begin to turn good, drawing the monkeys back into the banana trees. This was done during the 1920s through “stock pools” who paid off reporters to say good things about bad stocks and bad things about good stocks.
Road Warrior

Tuesday, January 15, 2013 - 7:41 pm · Reply

On the other hand something sure is right with the analyst and manipulators….
CupertinJoe

Tuesday, January 15, 2013 - 8:10 pm · Reply

My broker says the drop is because the big traders know the quarterly results and have since Jan 1. They have insiders that relay info to them. They started shorting then and continue now. Apple did not make the goal and in a week we will all know. By then AAPL will be below $425. Between now and then hordes of small investors will panic an sell. Then the big money will buy and force the stock up a ways. Then repeat the process. Too many small investors have no clue what is taking place. They are getting it in the shorts from the shorts.
- silverhawk1
  
  Tuesday, January 15, 2013 - 10:31 pm · Reply
  
  Something smells in Cupertino Joe. Me thinks tis you!
Agent Provocateur

Wednesday, January 16, 2013 - 1:53 am · Reply

Like I have been saying for the better part of a year:
It’s a nice $400 stock that was run up on rumors, wishful thinking, hyperbole and excessive fanboism.

I have been an Apple user since Jimmy Carter was President and storage meant a cassette drive. I have been an Apple shareholder since 2001. This is being typed on a Mac Pro with an iPhone 5 and an iPad nearby- the networking going through an Airport Extreme Dual Band and the image on an LED Cinema display, so I’m no troll.

Apple is a very rich company adrift in a depressed world economy and a very well heeled cabal of competitors undermining the future of Apple’s existing businesses.

The Android platform, stolen or not, is eating up massive chunks of business that should have been Apple’s by virtue of it’s first mover status and huge lead in phones and tablets. The array of developers working on hardware are outspending Apple and are offering a wider variety of customer options in price, features and forms. Google is refining and maturing the platform quickly and closing whatever leadership mindshare Apple has rightly earned through it’s efforts to this point.

If things are not changed by a disruptive Apple announcement, Apple will have hit a peak in market share in the more profitable portions of the market. Apple has already conceded the lower tier of the smartphone market to Android and those customers will look to the familiar when they upgrade.

Hollywood’s intransigence regarding video and movie content has made sure Apple has no residual lead in video despite the early offering of video and movie content via iTunes. Hulu, Netflix, Amazon, XBox and others offer pretty much everything Apple currently offers, much of which is ghettoized into Apple’s HW ecosystem.

The issue is not about who is smarter, who was there first or who is evil. The issue is not your preference or mine. The issue is that Apple has marginalized the company’s path forward by the tendency it has to lock everything into a closed monoculture of hardware and this is antithetical to the tendencies of consumers in the developed world.

Apple is not the trendy outlier among consumers getting tons of free buzz among those who chase trends. Face it, your Grandma & Grandpa have an iPhone- probably one you gave them as a gift or influenced them to buy. Most of the apps commonly used by average users are readily available on both platforms or soon will be. The issue of app lack for most people is not an issue.

Finally, Apple is an also-ran in cloud and internet based services. From iTools to iCloud Apple has been a laggard and a marginal performer. Google- owner of Android- is the dominant player in this area and Amazon- also in the Android camp- are miles ahead of Apple and are moving faster than Apple.

Sure, Apple is sitting on a ton of cash and is selling a lot of stuff. So was Microsoft a decade ago.
- Darwin
  
  Wednesday, January 16, 2013 - 8:03 am · Reply
  
  Nice speech. The only problem is nobody is making money on Android which renders your entire argument to be incorrect. There is nothing wrong with iCloud and it is doing its job quite well.
Kent

Wednesday, January 16, 2013 - 8:00 am · Reply

What is hurting Apple? Simple. It is the macro economy. Apple is the largest US company by market cap. It is also a consumer oriented company that relies on a healthy and growing economy. The current US economic strategy is simply this – massive tax increases on so many fronts they can’t be tracked, massive increases in government spending, and massive increases in government regulation. Each one of those is bad for the economy. Combined as an actual “strategy” they comprise a conscious effort to destroy the private economy. That recipe, which is seen the January 1 tax increases on everybody, and will be further seen when the debt limit is increased in a few weeks, and it evident in every unread bill of several hundred pages that is passed, with so much government regulation of private activities. Apple is the 800 lb canary in the coal mine. It’s stock price is the market selling short the future of the US economy under the current regime.
lazarus351

Wednesday, January 16, 2013 - 8:53 am · Reply

Been a fanboy for quite a few years at this point

There is nothing wrong with Apple stock, there is something wrong with Apple. It’s not what most on this site want to hear, but if you know Apple well and look at it objectively, you can feel it.
onuvob97

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