“Zabitsky, who founded his research firm Active Communications Integration in 1997 to consult the telecom industry and institutional investors, believes one of the most-favored stocks on Wall Street will decline nearly 50 percent because of competition from phones using Google’s Android software and because of a double dip in the American economy that will hit luxury brands as a consumer and government debt bubble bursts,” Melloy reports. “‘Apple is a luxury brand and in the past has correlated very well with LVMH Moet Hennessy and Christian Dior,’ said Zabitsky, who is based in Toronto, in an interview today. ‘America didn’t get rid of the bad debt, the government just took it over and consumer credit is trending down.’”
Melloy reports, “To put his $126 target in perspective, the average forecast from Wall Street analysts is $300.”
For what it’s worth, Zabitsky declined to reveal his models that get him to the $126 figure, but said it was based on much lower iPhone prices hitting margins. The increasing capabilities of phones made by HTC and the end of the AT&T exclusivity contract will be the catalyst for that plummeting profitability. When the iPhone came out it was grossly different,’ added the analyst. ‘Apple has raised the bar on what’s normal, but other phones are easily narrowing the difference because web technology is easier to program.'”
Full article here.
MacDailyNews Take: Oh, happy day! Our search for the new Laura has finally ended! Eddie, you’ve been iCal’ed with a bullet!
In the full article, Pete Najarian, co-founder of OptionsMonster.com and TradeMonster.com, said it best, “If he is right and economic circumstances cause Apple to drop to $126, we’ve got much bigger problems to worry about than that.”
Master investor Peter Lynch said it well when he explained that the market value (price) of a stock will always track the company’s earnings – eventually. There is not a day-to-day correlation. But eventually, if you look at a historical chart of a stock’s price INCLUDING a chart of the stock’s earnings, the two lines will correlate. When the price dips beneath the earnings line, it creates a buying opportunity.
(NOTE: I am NOT a technical trader. I believe in fundamentals only, not hocus-pocus of “teacup handles” and other flights of bizarre fantasy. But a chart can provide a follower of a company’s fundamentals with a useful look at how a stock performs versus its earnings.)
With Apple, you have to also factor in that the company has no long-term debt, as well as its large amount of cash. This reduces the price to earnings ratio of Apple stock considerably.
Unfortunately, for a day or so, idiots (or mean-spirited short sellers like this bozo, who actually appears to be both) get to unduly influence some market sentiment. But it is earnings more than anything else that establishes the value of a company’s stock. And that cannot be denied by jerks like this dork. Eventually, he will be proven wrong.
In short, be patient. You will be vindicated, and this idiot, after there is a margin call on his short-selling activity, will be in full retreat.
Stuff like this makes my head hurt.
@swing
Another poor satire? If not, please name ONE country in the world (in the history of the world) in which unregulated free market policy has produced a libertarian utopia.
Greece/Portugal/Spain/Ireland are all very close to insolvent. But not all western european countries with social safety nets are in economic despair. Denmark is in no danger, Germany’s unemployment is less than 5%. Why are these countries better off than their peers? They never bought into the ridiculous free trade/free market ideology their peers adopted. And they have strong unions to to protect wages and thus create demand in their markets.
MDN Magic Word: research
Why do people pay attention to these idiots?
Sounds to me like this moron Zabitsky, bought at the wrong time and is trying to influence the stock & recoup some losses.
I hope that he loses his shirt.
Poor guy doesn’t have a clue.
EDWARD ZABITSKY
Another target on the Tard Radar Screen.
Where do these nitwits come from?
Reminder: Apple is one of the few companies to not only be profitable, but to be consistently GROWING at an historic rate during the ongoing Bush Depression. Therefore, it’s stock is going to halve. Cue the jibbering village idiot.
I am typically on the side that says that Apple is over priced right now. Apple is big, but it’s not the second most valuable company in the world.
That said, $126 is a ridiculous price. Honestly I would put them at around $200. I know the iPad is selling well right now, but it’s no iPhone.$230 seems high to me, $126 is ridiculous. I’ld say $200 for AAPL.
When you’re asleep at the terminal all day looking at porn, you may find it difficult to put two and two together; that one day after a 900 point drop on the dow, a 50 point kick down in a well managed tech company with a 20 minute reversal to the upside, there is a man outside the shores of America calling for Apple to go to the 120’s.
This, with what has to be the greatest phone ever to be released coming in about 4 weeks. How much porn can you be watching not to see the that something is up? Surely it can’t be S.E.C.S, oops, the SEC.
A market that has zero regulation is simply criminal.
Everything needs regulation.
Civilisation is what regulation is usually called.
We regulate ourselves so that we dont go to excess.
You want a free-for-all? Go to some bar and start a drunken brawl.
Free market? Doesnt exist – never has, never will.
@ Wrong again
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Well… your name says it all: Wrong again
@ Dallasm
the price is actually an indicator of future expectations beyond the iPad, i.e. where Apple is going to be a few (or many) years from now. Also, the value is based on Apples performance compared to other companies, hence 200 would be a gross underestimation.
“The iPad is no iPhone…”
No, it´s the new computer (as in replacing everything that came before it). For most consumers it will be just that.
I just have to write a few more lines
@Wrong again
“If Steve would publicly and honestly commit to the future of the Mac…”
If Steve would honestly commit to the floppy disk and not scare us with all those new things that force us to learn new stuff… and alter existing production lines… then we could call him a visionary!
The future is – obviously – a place where everyone have huge boxes on their desktops (like the crt monitors used to be). No one wants to have his/her data with them when moving away from the desk…
—
You can´t plan the future of computing (or anything else for that matter) based on listing – and keeping – what you THINK are features, but actually are nothing but physical restrictions of today/yesterday (desktop, floppy, usb…)
Those are the things you (should) want to get rid of.
Whatever shape or form it may take, one thing is certain:
the future Mac WILL BE a mobile device.
Steve is very much committing to the future of the Mac – it might just be beyond your present comfort zone.
HAHAHAHHAHAHAHAHAAHAHHAAHHAAHAH
It never ends!!! These know nothing anylists are making me rich!!
Clueless doofus. Monday 5/10, pre-market ,Apple is trading up $12 a share at $247 from Friday’s closing price of $235. People know this one’s a bargain.
Maybe Katy has some competition!
It’s now Jan 26, 2012. Let’s see how Zabitsky did with his prediction. He advised selling AAPL short on May 7, 2010. I track the closing price of AAPL. The minimum it closed at from May 7, 2010 to today was $235.86, which was the closing price on May 7, 2010. In other words, AAPL NEVER closed below its closing price for that day. Today, it closed at $444.63, an 88% increase and 252% above his prediction of $126. Zabitsky should take up another career, perhaps holding the Stop-Slow sign at road construction sites.
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