Apple takes insane pounding on dubious downgrades; sheds $20,357,430,480 in market value

“Apple Inc. shares fell to their lowest levels in more than 16 months Monday as two analysts cut their ratings on the Mac maker’s stock due to a growing risk that consumer spending on high-end electronics is slowing down heading into the end of the year,” Rex Crum reports for MarketWatch.

“By the time the market closed, Apple’s shares (AAPL) had fallen $22.98, or almost 18%, closing at $105.26. The stock has plunged nearly 40% over the past month on worries about slowing demand, as well as the technical issues that have plagued the launch of its 3G iPhone,” Crum reports.

MacDailyNews Take: “Worries” in the absence of proof. And, if that’s a “plagued” launch, thank you sir, we’ll have another:
Apple intends to make at least 40 million iPhones in the next year – September 22, 2008
• Apple iPhone: 8 million total units so far – September 02, 2008
• Analysts estimate Apple will sell 3 million Macs, 5 million iPhone 3G units this quarter – August 22, 2008
Apple iPhone now available in 43 countries to 660 million potential customers – August 22, 2008
Apple inks iPhone deals with 3 Russian carriers; expects sales of 1.8 million units per year – August 22, 2008
Report: Apple plans to build 45 million iPhone 3Gs in next 12 months – August 22, 2008
Lehman Brothers expects Apple to sell 12.1 million iPhone 3G units this year – August 14, 2008
• Piper Jaffray analyst conservatively expects Apple to sell 4.47 million iPhones this quarter – August 13, 2008
• Analyst: 3 million iPhone 3G units sold in first month – August 11, 2008
• Apple CEO Steve Jobs: Over 60 million apps downloaded from App Store in first month – August 11, 2008
• Apple sells one million iPhone 3Gs in first weekend – July 14, 2008

Crum continues, “Before the opening bell, Kathryn Huberty of Morgan Stanley cut her rating on the stock to equal-weight from overweight. RBC Capital Markets analyst Mike Abramsky made a similar move, lowering his rating to sector perform from outperform.”

Crum reports, “Huberty said several factors present a challenge for Apple as it tries to maintain its growth rates in the PC market. She noted that Apple has about 69% of the market for U.S. consumer PCs that cost more than $1,500, saying that ‘the combination of slowing unit demand and a shift to lower-end price points put Mac growth at risk.'”

MacDailyNews Take: Based upon what? Nothing of any substance.

Crum continues, “She also said that slower growth, along with more investment to expand Apple’s iPhone reach will drive up the company’s operating expenses and put pressure on earnings next year.”

MacDailyNews Take: Proof of Apple’s slower growth? We see none.

Crum continues, “Morgan Stanley was concerned that consensus estimates had not been revised downward to reflect slowing consumer demand.”

MacDailyNews Take: Perhaps consumers will become more discriminating and choose higher quality Apple products over inferior junk that comes with lower sticker prices but higher total costs of ownership? Yes, we agree, it’s probably too wishful to expect most people to actually think before buying, but hope springs eternal.

Crum continues, “At RBC, Abramsky lowered his price target on Apple’s stock to $140 a share from $200, saying that the stock isn’t ‘recession proof.’ The analyst predicted that Apple would report good Mac sales for its fourth quarter, which finishes at the end of September, and said he anticipates unit sales will rise 34% in the quarter from a year ago. However, Abramsky trimmed his estimates for Apple’s Mac sales to 2.9 million units from 3 million, and there is an ‘elevated risk’ that the company will give a disappointing first-quarter forecast.”

MacDailyNews Take: Typical manure shoveling. Apple always gives overly-conservative, sorry, “disappointing,” guidance. Newsflash: They’ll likely do it again next quarter. And the quarter after that. And the quarter after that. By the way, in January, Amramsky spoke favorably of Apple’s potential to weather the ongoing economic downturn, explaining that while the Cupertino-based firm is certainly not “recession proof,” it exhibits signs of being “recession resistant.”

Crum continues, “Abramsky cited an RBC survey of 4,300 people that showed the expressed intentions of consumers to buy a Mac are down. The RBC survey said that 29% of respondents intend to buy a Mac over the next 90 days, down from 34% in August.”

MacDailyNews Take: Duh. That’s no surprise when all we hear via a poorly-educated and unprepared media is that we’re about to enter a “depression.” Morons. In our opinion, these two analysts’ analysis of Apple are highly specious and reek of panic, among other things. By the way: According to Abramsky, 29% of consumers surveyed intend to buy a Mac over the next 90 days. Think about that for a second.

Think about this, too:
Apple smashes Street; reports record third quarter results, all-time high Mac sales – July 21, 2008
Apple smashes Street, reports record second quarter results – April 23, 2008
Apple beats Street; reports best quarterly revenue and earnings in company history – January 22, 2008
Apple bulldozes the Street; reports revenue of $6.22 billion, record 2.2 million Macs shipped – October 22, 2007
Apple smashes Street; posts record Q3 revenue and profit – July 25, 2007
• Apple smashes Street, posts revenue of $7.1 billion and record net quarterly profit of $1 billion – January 17, 2007

Full article here.

AAPL lost $20,357,430,480 ($20.36 Billion – with a “B”) in market value today and that, dear friends, is simply wholly disproportionate to reality. Period.

Those who keep their heads when others panic often profit handsomely.

Wall Street is a game. If you decide to participate, play it well.


  1. MDN’s knowledge of financial markets is totally worthless. The reason every fscking company’s stock dropped has nothing to do with analysts, but because Wall Street is whining because they can’t get $700 billion in hand outs from the US government. Apple is getting hammered, because every short-seller is having an orgasm. Apple could release the 10G iPhone today, and the markets would short it.

  2. @OnlyMacs

    Due to the way history is with Apple, they’d release the 10G iPhone and stocks would tank. Analysts would praise it right away though so that theycan buy it all up when its down then watch themselves make a nice profit all from typing up bullshit and putting it in the paper.

  3. The Wall Street Gang is running around with their hair on fire. The economy will do what the economy will do and eventually the market will stabilize. No point in bailing now – all you will do is lock in your losses. Look at the fundamentals – Apple is a successful company with boatloads of cash in the bank. Across the board NASDAQ leaders got hammered today losing about 10% on average. Apple did worse. So what. Relax and take a long position. Panic and lose your money.

  4. Look at it this way:

    Food, clothing, and shelter are necessities.
    iPhones, iPods, and iMacs are not.
    Hence AAPL getting clobbered.

    Was much of today’s loss undeserved? Hell yeah. Just Wall Street throwing the Mother Of All Shit-Fits because they’re not gonna get the Mother Of All Handouts.

    But if the economy does crap out & people are forced to focus on the essentials, that’s not good (in the short-term) for luxury and discretionary makers.

    Still, Apple’s a great prospect for the long haul, if you have the stomach for it.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.