Apple shareholders could be in for a rough ride ahead

“Fasten your seat belts,” Philip Elmer-DeWitt blogs for Fortune.

“Although Apple should report better-than-expected quarterly earnings on Monday — it almost always does — its shares could be in for a bumpy ride on Wall Street,” Elmer-DeWitt writes.

“Apple’s stock price — having bungee-jumped from $200 in late December to below $120 in mid-March and then back up to $190 in mid-May — has been drifting lower ever since, despite the high-profile launch of a new iPhone and the expectation of sharply higher earnings,” Elmer-DeWitt reports.

“These days, even 18% earnings growth from Apple is unlikely to impress the Street. The company could report its best third fiscal quarter (our calendar Q2) yet and still lose market value,” Elmer-DeWitt reports. By most accounts, Q3 was a strong one for Apple. In a report to clients issued Friday morning, Piper Jaffray’s Gene Munster saw good news in all three of its key divisions: [Mac, iPod, iPhone].”

“But Wall Street’s antennae are finely tuned for disappointment. Although Apple just had a record-breaking, made-for-TV product launch — with people still queuing up for the iPhone 3G a week after it went on sale — none of that produced much traction in Apple’s share price. Investors seemed to concentrate instead on the fact that Apple’s iPhone activation servers melted down, that most of their stores ran out of product and that the new MobileMe suite of Web services is a mess that the company still hasn’t cleaned up,” Elmer-DeWitt reports.

“Finally, there’s the matter of Apple’s guidance for its fourth quarter… how conservative? If it’s the usual 9% or 10% below expectations, it shouldn’t make much difference. Anything lower could damage the stock. And if {Apple] offers guidance that’s better than expected, who knows, the stock might actually go up,” Elmer-DeWitt reports.

More in the full article here.

59 Comments

  1. Makes no sense, look at all the positive information: Apple has a blowout quarter selling desktop Macs. Apple increases notebook orders by 20%. Max OSX gains in market share. Apple selling iPhones by the busload… Once again analysts will focus on the minute negatives and that drives down the stock price.

  2. I’m with “Not That Steve”

    THINK LONG.. these idiots gotta write something.. what do they know? if they were so smart they wouldnt have to write their dribble for a living. Its always good to take financial advice from these EX-SPURTS.. NOT..

    I hope it goes down.. I waiting to buy more.. sell everybody..sell..drop the price..I dont care..I’m buying more..

  3. What you’ve got is a bunch of emotional investors buying and selling on a bit of news or what they see the price of the stock doing on a minute by minute basis. Fundamentals for AAPL are strong quarter to quarter, but the market’s not being driven by those who know a stinking thing about fundamentals.

    I lost my shirt on AAPL in 1st and 2nd quarters of 2008 and I shall not be bitten in the arse again with the volatile emotion-driven trading found in this particular stock.

    Love the products and the company though. I’m a mac man all the way.

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