Clearly, something is wrong with Apple’s stock

“Action in Apple stock suggests that shares are headed lower in the near-term, Rosecliff Capital’s Mike Murphy said Tuesday on CNBC,” Bruno J. Navarro reports for CNBC. “‘I really thought you’d see a rally on the fundamentals,’ he said. ‘The fact that the stock is down here, it tells you every single time it rallies, it gets hit with a wave of selling and going lower.'”

“On “Fast Money,” Murphy said that he added to his long call position and expected the stock to climb after it reports earnings on Jan. 22,” Navarro reports. “Joe Terranova of Virtus Investment Partners admitted that calling Apple stock “a generational buy” on Nov. 16 was incorrect. ‘Clearly, something is wrong with the stock of Apple – not the fundamentals – the stock of Apple, and where the support is, I don’t think anyone truly knows,’ he said.”

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38 Comments

  1. There is nothing wrong with Apple’s stock. It’s humans that have a problem. They’re delusional. Scared. Weird. Wayward.

    The stock’s volatility is simply a manifestation of the human condition. There’s nothing you can do. If you don’t like it, don’t buy into the stock market.

    Why are people worried? One, the iPhone parts demand thing. The other thing is that I think people are much less confident without Steve Jobs. This latter can’t be understated.

    1. So, why isn’t Amazon being affected by anything? Superhigh P/E, razor-thin profits, Bezos spending money as fast as it comes in. The stock is stronger than ever Why should Amazon be worth more than half the share price of Apple? I’m sure they’re not selling nearly the amount of Kindle Fires they thought they would. Nobody even seems to care. Nobody is tracking Amazon Kindle Fir components or supply.

      I hardly ever see analysts yelling Amazon is in a bubble. Shouldn’t investors be frightened about the solidity of Amazon. Why is it always Apple that frightens investors when Apple is earning plenty of revenue and have a huge cash reserve?

      1. Put another way, if Apple stopped making a profit, how long would the company be able to run before it had to be liquidated? Amazon?

        I would say Apple would have a few years, Amazon maybe 6 or 7 months.

  2. It’s because I finally bought some Apple stock a couple months ago. Nothing about the company fundamentals has changed recently. The only explanation I can find for why it’s not bouncing back from this dip quickly like it has with every other dip in last couple years is because now I have stake in it.

    1. Hopefully you didn’t do a large part of your portfolio.

      AAPL should always be a small portion. Don’t put all your eggs in one basket. Especially when wealthy institutional types are carrying the basket.

  3. It’s the quarterly cocking of the slingshot. Push the price down before the earnings report, then let it fly after they blow past all estimates. The market is a crooked game…

  4. Apple can do one of these things:
    1) take it private or
    2) decrease the number of shares in the market by a reverse split, a 1 for 2 exercise.

    Option 1 is very drastic and also very expensive. It could wipe out the entire cash hoard of Apple and most possibly Apple would have to borrow money from Wall Street’s banks for this purpose.

    Option 2 would preserve Apple’s cash hoard and would also limit the damage of Wall Street’s perfidy and allow Apple to have greater control of its destiny. Let’s see how much further Wall Street would drive down the share price. Buybacks would be okay if the shares are low enough to do so. After Apple feels that it is in control of its own shares would it then slowly increase the number of shares on the market, not to the former level, by rewarding shareholders with bonus issues, like 1 for every 100.

    Apple should never issue any option stocks because it would just encourage gambling and not investing. Also Apple should never split its shares and create more papers in the market. Creating more papers would not solve Apple’s present stock situation but would exacerbate it further. Apple has enough money in its hands and does not need to raise any funds from Wall Street for expansion. So creating more shares just to raise funds is stupid for a company like Apple which is flushed with cash. This is the only option for companies that do no have the cash for expansion.

    Increasing the dividend payment would be good if the number of shares on the market is limited.

    1. If I were in Tim Cook’s shoes my assessment would be this: Clearly making tremendous revenue and profits does not positively impact the value I’m returning to share holders. Therefore, the best way I can return value to shareholders is via an instrument I can control: Paying dividends.

      If Tim Cook starts getting overly concerned with the stock price, then he’s practicing a religion Scully, Spindler and Ameilio retired from.

      If I were in the shoes of Wall Street I would assess things this way: When Tim Cook pays more attention to giving profits back to his shareholders than he gives to us in mergers and acquisitions fees, there is no reward for us supporting him with positive stock outlooks.

      1. Jobs knew that Tim Cook was a supply chain and production master and knew exactly what he would with those attributes as when he took over. Shut up and watch, is a good approach for the rest of us.

    2. What on earth would a reverse split accomplish? It’s true that it would reduce the number of outstanding shares by half, but it would also double the value of each share. Are you confusing a reverse split with a stock buyback?

  5. It is simple, from my point of view. AAPL is misunderstood and the stock suffers a bit. The real story is that institutions and traders are all riding these waves as more retail public buys in and hopes for the rally. If a small rally develops, traders start selling until the retail public gets scared off. There is a lot of money to be made shorting the stock when it is up and going long when it is down. In the end, the retail public will panic and sell to the institutions who will clean up.

  6. What we are seeing is investor’s dissapointment in what was released by Apple last year. Remember everyone Microsoft has “made” money for years but people kept saying if all MS can do is sell Office and Windows someday they will begin to fall. We are seeing that now with PC shipments. Apple is at its 3 year mark. That is a notable time window because they are do for a “revolution.” Apple gets the money because they wow and exceed what we expect. Right now Apple is only meeting what is expected. The market drop is precisely for that. Remember Apple’s growth is way beyond the “core” Apple people like many of us. Like any music band “hits” are needed to keep the excitement. Its been 3 years. Time for a hit.

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