Why the AAPL sell off? Good news not good enough says Wall Street

Apple Online Store“Why the [AAPL] sell-off? This might be one of those classic examples of expectations exceeding reality, and therefore we have a sell-on-the-news scenario just a day ahead of Apple’s earnings release,” Jim Goldman reports for CNBC.

“NPD reported that Mac sales went from a year-over-year increase in February of 43 percent to a year-over-year increase of only 7 percent in March,” Goldman reports. “And while Piper Jaffray’s Gene Munster still believes Apple can hit his unit expectations of 2.8 million to 2.9 million Macs sold during the quarter, he had anticipated growth around 20 percent in March, which would have translated into a Mac sales number of over 3 million units.”

“In other words, even before Apple reports its earnings, NPD says the company will likely miss the rather optimistic whisper numbers floating around the Street. Apple shares are getting hit hard because of this. Munster says desktop sales dropped 5 percent year-over-year in March while laptops increased 14 percent,” Goldman reports.

Goldman reports, “NPD says overall, Mac sales increased 25 percent year-over-year for Apple’s March quarter. Consensus was up about 22 percent. But weakness in the month of March is likely what’s causing today’s sell-off. It’s a clear case of good news simply not being good enough.”

Full article here.

MacDailyNews Take: What, you want Wall Street to react logically to third-party estimates about one-month of Mac sales? Don’t be silly. That said, being off 0.65%, as AAPL is right now, is not much of a sell-off, now is it? Perhaps logic actually has somehow prevailed on Wall Street today.

Another potential (and more sensible) reason for the “sell-off” might be Gizmodo’s “4G iPhone” and its potential to freeze the iPhone market until June.

31 Comments

  1. @ DallasM;

    [url=”http://www.financialadvisory.com/article/13-03-2010/756/wal-mart-(nyse-wmt)-overtaken-by-apple-(nasdaq-aapl)-as-third-largest-american-company/
    “]Third largest American company[/url]

  2. Here’s an idea, stop watching the f-ing stock every 5 minutes. Show us a trend line over a year or a quarter, a month, hell I’ll take a week trend over the every 5 minute stock-watching-pot-isnt-boiling routine they are doing now.

    It’s a marathon, not a sprint.

  3. @Dallasm

    First off AAPL isn’t responding TODAY for being overpriced. You cannot pinpoint any ONE thing and say that’s what caused them to react today they way they did.

    Secondly, uh, the stock was only down .33

    Thirdly of those companies you mentioned they aren’t that much cheaper on a P/E ratio than Apple and in fact Google is more expensive than Apple.

    And lastly and probably most importantly…

    Investors buy stock on future speculation. MS, HP ATT are old tired companies that have mature product lines. Apple behaves like a growth stock and appears to be heading for more years of growth ahead. That they have a small market share in computers is actually a positive, in that every little percentage of market they take is worth billions to their bottom line. Companies like MS are already at or near their max market share and have fewer opportunities for growth. Their stock chart looks like the heart monitor of a dead man.

    People love AAPL because they see a winner for years to come. All you have to do is look at their revenue and earnings YOY for the past few years to realize this. So if their P/E is a little higher, that’s why.

  4. @Me In LA

    I loves me some Apple but lets not get carried away. Apple is NOT the third LARGEST American company. They have the third largest MARKET CAP, and that a huge difference.

  5. There could be some truth to Apple not hitting numbers for the quarter. Desktop sales SHOULD be down. They haven’t done a significant desktop model upgrade in quite a while (seems like forever, for the Mac Pro). Lots of people are holding off desktop purchases (I’m one, in fact) until new models appear. And I personally have no doubt that Apple has been shifting a lot of its attention toward the iPad and iPhone development. But a sell-off? Meh. Doesn’t look too scary yet.

  6. @Macromancer

    “Apple is not the third largest American company.”

    Actually, they are, valued as one values any equity — a house, a car, or a fleet of airplanes: by what it currently sells for.

    Revenue, inventory, plant and equipment, cash on hand, profit: these are what look at to judge value for themselves, but until I offer someone money for the company or some fraction of it, and he takes it, it’s purely academic.

  7. One day’s move does not usually mean much.

    Those who seek the answer whether stock markets are efficient need to include all the fear, doubts, greed, ignorance, hope, short sellers, day traders, hedge traders, pumpers, dumpers, haters, along with actual information in their equations.

    Personally, I buy whoever is gaining relevance and sell those losing it. I bought AAPL several years ago and they have not stopped gaining relevance yet. Despite having increased by a factor of 31 for me, there is obviously considerable upside remaining as long as management follows its present vision. With AAPL part of your bet is on products no-one has even seen yet. You’re buying a fountain of transcendent thinking. One month’s sales guesstimate or one day’s SP movement is not very significant.

  8. @Dallasm

    More profitable for who? What return has an investor gotten with msft over the past 5 years? It’s number 2 on that all-enlighten list of yours. That would be 27%………. That’s impressive ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    I know you Apple haters like to go out and cherry pick the data that helps your cause, but when this stock breaks $300, don’t let your blood pressure go too high ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  9. What happened MDN? You retards. Maybe Wall Street is reacting to the notion that Apple is completely overhyped, their sales are not what people were expecting, their market share is stagnant and investors are finally coming around to the reality that the non-apple fanboys and rational analysts have been living for some time now.

    Pathetic.

    Meanwhile, Microsoft up 1.20% and P.S. Google is trading at $550 a share. Normally, I really wouldn’t care about Microsoft (only Google, which will eventually dominate mobile cloud computing, something Apple simply doesn’t get) but god does it feel good to rub salt in your stupid fanboy wounds.

    Enjoy…

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