“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.
The big hedge funds can’t short financial stocks (because the SEC says they can’t for now) so they are shorting everything else. Plus macro economic factors are in play. But two analysts downgrading Apple at exactly the same time for no good reason … this seems like coordinated market manipulation. Almost as bad as after hours trading. The stock market is a big joke because The SEC nevers regulates or punishes anyone.
Waow! And have you seen Nasdaq’s? If Apple’s shares fall… the others will fall even harder! Might be the end of the shareholders’ world…
i hang out with a lot of business and i/t people and i have yet to find one with a UMPC or EEE computer. the majority of them are using mac and dell full functional laptops.
as for decreasing demand, i just bought a 3g iphone. my business partner bought one a week before me and 3 others in our office have either an 8 or 16 gig model. another partner bought a mac book, when her husband decided to get a macbook pro. so at least 10 apple devices in the space of 4 weeks. and no, these guys aren’t rich, it was just time to upgrade.
slowdown? what slowdown?
This is Sarah Palin’s fault.
Imagine if you were a CEO with, say, $20B in cash. And you knew the crash was going to happen sometime. When companies are crumbling and you can buy blue chips companies for pennies, who will you buy?
MacDailyNews Take: No list of dumb Apple predictions can be complete without this year’s gem: “I am putting a sell on Apple, the company that created the iPhone,” Laura Goldman, investment advisor, LSG Capital, May 21, 2007. AAPL closed at $111.98 that day. Apple has risen approximately 70% since Goldman’s “sell” recommendation.
“Apple takes insane pounding on dubious downgrades”
Change a few words there and you have a great title for a Jenna Jameson movie.
“In short, how about watching us not slip into a fully realized recession, but cruise right by and hit a full fledged depression.
It isn’t pretty folks, and the last thing we need is Government controlling our banking system all the more. They had a big hand in screwing it up in the first place. “
What typical Republican BS! The Government screwed it up by NOT having a hand in the banking system. It was DEREGULATION that allowed massive fraud, which resulted in millions of bad loans. So what to Republicans want to do to fix it? They want to get the Government out even more!!
Reality Bytes:
#1 There is no melt down – a market drop of 6% is not a meltdown. No matter what the news folks tell you.
#2 The folks who screwed this up should not be given a get out of jail free card. All the Feddie Guys and Treasury Guys and Bush and anyone else who approved of the deregulation that went into place after this happened in the late 1920’s should be hung or shot or both!
#3 The money is not drying up – it is going somewhere else. I have a very good friend who is making a mint right now because people are moving out of the shares/stock market and into his investment environment – and no I won’t tell you – you don’t have enough money. Trust me. Minimum drop in his world is $1 Billion (with a “B”).
#4 APPL is a great buy. if you can pick up at least a couple thousand shares.
#5 When the Feds say they are retracting “X” dollars (X = A VERY VERY BIG AMONUT OF MONEY) from the M1 – then you need to worry about a recession. And there is no way the market will be manipulated into another depression. Too many warmongers self interest at heart.
#6 If you don not know what I am talking about look for Zeitgeist on the web – watch it and then make some wise sound decisions.
#7 Do all you can to stop short selling and all forms of options – it is what ruined the market in the 20s and it is trying to do it again. Read P&Ls;and Balance sheets and make smart decisions. Become a Warren Buffet investor.
Cheers.
Oh by the way… if you really want to know:
Former Kissinger Policy Planner, CFR Member Calls For New Global Monetary Authority- Former Wall Street exec wants bailout and more… much much more
By Steve Watson
A Council on Foreign Relations member and former policy planner under prominent Bilderberger Henry Kissinger has penned a piece in the Financial Times of London calling for a “new global monetary authority” that would have the power to monitor all national financial authorities and all large global financial companies.
“Even if the US’s massive financial rescue operation succeeds, it should be followed by something even more far-reaching – the establishment of a Global Monetary Authority to oversee markets that have become borderless.” writes Jeffrey Garten, also a former managing director of Lehman Brothers.
Garten, now a professor of business at Yale, served on the policy planning staff of Kissinger during his time as Secretary of State. He also served on the White House Council on International Economic Policy under the Nixon administration and went on to become the Undersecretary of Commerce for International Trade under Bill Clinton.
Citing “globalization”, A “clash of philosophies” and the “vacuum at the centre” of the current global institutional apparatus, Garten describes his vision for a new monolithic world authority to oversee all financial activity around the globe.
Here are some of the highlights (emphasis added):
A GMA (global monetary authority) would be a reinsurer or discounter for certain obligations held by central banks. It would scrutinise the regulatory activities of national authorities with more teeth than the IMF has and oversee the implementation of a limited number of global regulations. It would monitor global risks and establish an effective early warning system with more clout to sound alarms than the BIS has.
It would act as “bankruptcy court” for financial reorganisations of global companies above a certain size. The biggest global financial companies would have to register with the GMA and be subject to its monitoring, or be blacklisted. That includes commercial companies and banks, but also sovereign wealth funds, gigantic hedge funds and private equity firms.
The GMA’s board would have to include central bankers not just from the US, UK, the eurozone and Japan, but also China, Saudi Arabia and Brazil. It would be financed by mandatory contributions from every capable country and from insurance-type premiums from global financial companies – publicly listed, government owned, and privately held alike.
In a conclusion that smacks of problem, reaction, solution Garten adds “In terms of US and international politics, a Global Monetary Authority is probably an idea whose time has not yet come. That may change as today’s crisis evolves.”
What he describes is nothing less than a global financial dictatorship, operating across borders and forcing nations and corporations to register and adhere to strict monitoring and obey the same regulations. The implementation of such a system would represent total interventionism and the absolute final nail in the coffin of the free market.
Garten’s call for a GMA echoes a piece published in the FT back in June by Timothy Geithner, president of the Federal Reserve Bank of New York.
Fresh from attending the Bilderberg conference in Chantilly, Virginia, Geithner called for a globalized banking system with “appropriate requirements for capital and liquidity”.
informationliberatio dot com
You have absolutely no clue as to what caused this.
It was regulation requiring these loans, not deregulation.
Get a clue before blaming Republicans for Democratic shortsights.
@Lucky Dog,
” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> I had a standing order and it played at 119. Would I have liked it to go at 107, you bet your ass. But:
Shame on you……
But when Apple is hitting 200 on the market rebound, it will not really make much difference. Just long on a really great company that is making and selling tons of great product……. around the world.
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I bought AAPL at $50, the day they announced the iPhone. It will rise again.
Just checked. Dell is still valued well under where Apple is now. So, excuse me while I try to figure out how to get some money to buy AAPL at this bargain rate. One of my portfolios ought to be down “not so much”.
Thanks for this interesting and informative post, I’m really enjoying checking up your posts from time to time.
Good luck, Barney.
Again… as they talk out of their asses… that “drop” yesterday was a global market drop… and today…
Tue, Sep 30, 2008 – 07:43 PM EDT — AAPL: 113.66 (+8.40, +7.98%) Apple regains over $8 per share of that “drop” from yesterday… please… the money markets (stocks, banking, etc) need to stop being guided by the morons of the world…
“Apple takes insane pounding”
Change a few words there and you have a great title for a Jenna Jameson movie.
“It will rise again.”
So will the south.
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..after what they have made me suffer;
Its disturbing, as I purchased my MacPro 8-core last September and was Diagnosed with AML M3 (Acute Promyelocytic Leukemia) just months later. The doctors asked me if I knew if I had any exposure to Benzene……..TOXIC KILLER Macs 🙁 🙁 🙁
This is one of the best articles I have read on this topic! looking forward to see your future posts.
Cheers,
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