“Historically, however, when a company becomes preoccupied with the grandeur of its premises, it often signals a high point in its fortunes. These fantastical buildings may end up as little more than costly monuments to vanity and a loss of focus on the core business that made for success in the first place,” Rigby and Barr report. “‘I’ve been thinking the Apple spaceship is going to get nicknamed the ‘Death Star’ because the project is so big and the timing is so bad,’ said hedge fund manager Jeff Matthews of Ram Partners. The building is coming to fruition just as Apple’s product cycles may be maturing, he explained. ‘It is such a classic contrary indicator that you just get the shakes.’ He no longer holds Apple stock.”
MacDailyNews Take: His and his clients’ loss. Trying to convince yourself that you made the right stock move in a Reuters article is sad. iPhone was released 5 years, 7 months, and 19 days after iPod. iPad was released 2 years, 9 months, and 5 days after iPhone. Tim Cook has been Apple CEO for 1 year, 9 months, and 6 days.
“Walter Price, who runs technology investment funds at RCM Capital Management LLC, shares the outlook: ‘When companies build big headquarters it’s usually when they’re doing really well and have strong outlooks, and that often coincides with a peak in their stock,'” Rigby and Barr report that, of the four companies, “Apple has the most ambitious idea, a 2.8 million square foot glass ring on 176 acres. It would be in part a monument to former Chief Executive Steve Jobs, who described it as like a spaceship and was closely involved in the plans before he died in 2011. The project, which could cost up to $5 billion according to reports, would house about 12,000 Apple employees.”
Read more in the full article here.