Steve Jobs’ guidance games are hurting Apple shareholders

“The recent slide in Apple (AAPL) shares can be attributed to one thing: Steve Jobs playing games with expectations. Now it is coming back to haunt shareholders. Here is how it typically goes: Jobs gives guidance that he knows is too low and then Apple blows it away and the stock surges. Analysts have relied on those expectations to make their estimates and have traditionally been too low,” Todd Sullivan writes for Seeking Alpha.

“Not being idiots, they caught on to the game and have ratcheted their expectations higher than they expect Jobs to ‘guide them,'” Sullivan writes.

“A funny thing happened this week. Apple guided analysts lower than what they thought the ‘low ball’ expectation would be… The problem is that people just do not believe what Jobs is telling them,” Sullivan writes.

“In the current environment, indecision equates to fear and shareholders are suffering,” Sullivan writes. “If you are going to give guidance, conservative is one thing but playing games like Jobs has with it is just wrong because eventually it comes back to bite you. No one can doubt his genius or showmanship, it was hubris that was his downfall once and is hurting him again now.”

Full article here.

[Thanks to MacDailyNews Reader “MacVicta” for the heads up.]

54 Comments

  1. Even though Apple is currently rocking, why would anyone be surprised that with the economy tanking the way it is – with Apple apparently unaffected thus far – that he would guide low? If anything that’s not doing a disservice to the shareholders.

    Apple in the next quarter could potentially be affected here, and sales could indeed suffer couldn’t they? I don’t get it.

  2. oh please….
    ….the market and industry rags are worse than cable news. create hysteria, conflict and conspiracy out of nothing and then try to assign victimhood to large groups so they rise up and create more hysteria, conflict and conspiracy.

  3. Could you consider making a special section, called “Pump & Dump News”, to satisfy those whose only interest is in shares, and not the computer for the rest of us. We’re not all shareholders, and the games they play are tiresome.

  4. I’d rather Jobs and company guide low and then beat guidance as opposed to the other way around. You think you got beat up today?… you ain’t seen nothing. Wait till the day Apple doesn’t beat their guidance. There will be major blood the day that happens.

  5. Jobs needs to give a reasonable number Apple can meet in a down economy. If he is more aggressive, and Apple misses their target by even 1%, stock prices take a massive hit. He isn’t conservative one time and aggressive another. That would be playing games – using numbers to further your own agenda. He consistently delivers conservative estimates. He’s not throwing a “change up”.

    Give it a rest!

  6. I’d rather Jobs and company guide low and then beat guidance as opposed to the other way around. You think you got beat up today?… you ain’t seen nothing. Wait till the day Apple doesn’t beat their guidance. There will be major blood the day that happens.

  7. Another moronic analysis from Seeking Alpha. Apple is CONSISTENT in their conservative guidance. Consistency is the key. If they were haphazard, that’s gameplaying and the SEC would look into it. There’s nothing wrong, and everything right in consistency. How can guidance for 29.3% higher revenues be lowballing low estimates? What planet are these idiots on?

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