“On Thursday Carl Icahn said he had sold his remaining Apple shares due to concerns about China,” Chuck Jones writes for Forbes. “Could China be a convenient excuse?”
“Apple did report a lousy quarter, especially in its Greater China region with revenue down 26% year over year. It wasn’t quite as bad in Mainland China since Luca Maestri, Apple’s CFO, said on the company’s earnings conference call that ‘In Mainland China, revenue was down 11%, and the decline was 7% in constant currency terms. Keep in mind that we were up against an extremely difficult year-ago compare when our Mainland China revenue grew 81%,'” Jones writes. “Keep in mind that over a two year period Apple’s Greater China revenue is up 27% and if you add the December and March quarters together the company’s revenue has increased 60% over that timeframe.”
“Apple may be one of the most liquid stocks or investments in the world since it is the largest by market cap. It is something that can be sold if someone needed to raise cash and didn’t want to crater the asset’s price and therefore their investment value,” Jones writes. “While Icahn is probably concerned about Apple’s business in China it would appear that another reason for his sale of Apple’s shares may have been to raise cash since he owned about $4 billion worth of Apple’s stock.”
Read more in the full article here.
MacDailyNews Take: Could China be a convenient excuse? Most likely, yes.
We heard Icahn sing Tim Cook’s praises as he announced his sale of his Apple shares on CNBC, shortly after Apple’s CEO said this:
We know the conditions in China have been a source of concern for many investors. Last summer, while many companies were experiencing weakness in their China-based results, we were seeing just the opposite, with incredible momentum for iPhone, Mac and the App Store, in particular. In the December quarter, despite the turbulent environment, we produced our best results ever in Greater China, with revenue growing 14% over last year, 47% sequentially, and 17% year-over-year in constant currency. These great results were fueled by our highest ever quarterly iPhone sales and record App Store performance.
Notwithstanding these record results, we began to see some signs of economic softness in Greater China earlier this month, most notably in Hong Kong. Beyond the short-term volatility, we remain very confident about the long-term potential of the China market and the large opportunities ahead of us and we are maintaining our investment plans.
Despite the economic challenges all over the world, Apple remains incredibly strong. — Apple CEO Tim Cook, April 26, 2016
SEE ALSO:
Why Carl Icahn is wrong about Apple and China – April 29, 2016
Carl Icahn out of Apple over worries about China’s ‘dictatorship’ government – April 29, 2016
Carl Icahn dumps all of his Apple shares; stock drops – April 28, 2016