Apple disputes Goldman Sachs’ analyst Rod Hall’s claim; says Apple TV+ will not have ‘material impact’

Apple, in a statement to CNBC, disputed the negative call by Goldman Sachs’ analyst Rod Hall who this morning claimed, erroneously, that the one-year free trial of the Apple TV+ service would have a “material negative impact” on earnings by showing lower hardware profit margins.

Michael Sheetz CNBC:

“We do not expect the introduction of Apple TV+, including the accounting treatment for the service, to have a material impact on our financial results,” the company said in a statement to CNBC.

Apple shares – which fell as much as 2.6% on Friday – finished trading down 1.9% at $218.75 a share.

Goldman predicted a slide greater than 25% in the stock over the next 12 months. The firm cut its 12-month price target on the company to $165 from $187. The move made Goldman’s target the lowest of the major Wall Street banks…

MacDailyNews Take: The U.S. SEC should get up off its fat collective ass and ask why an analyst for a major bank cannot manage to call Apple and ask for clarification before negatively hitting the company’s stock price with unsubstantiated FUD that could have been cleared up in a 30-second phone call to Apple CFO Luca Maestri’s assistant’s assistant.

Furthermore, if he hasn’t already, Apple CEO Tim Cook should get Goldman Sachs’ CEO David M. Solomon on the phone and ask him why, if he likes all of the business Apple is funneling to his company with Apple Card, is he employing an abject moron to analyze Apple? After he sputters nonsense, ask him if he’d like to continue to enjoy all of the business Apple is funneling to his company with Apple Card. Our suggested closing line: “Enough is enough, David.” (click)

Hey, did Goldman hold a massive short position on AAPL? Does Goldman hold Netflix shares? If so, how many? What are Hall’s personal holdings, if any? Those are some other interesting questions among many that the SEC might want to look into as well.

Is Goldman Sachs’ analyst Rod Hall just a wildly overpaid incompetent cretin or is something else going on here with his serial negative calls on Apple that turn out to be quite wrong? Is Hall just stupid or is he stupid like a fox?

As we wrote back in July when Hall claimed – erroneously again – that Apple’s App Store growth was slowing dramatically (Apple revealed less than two weeks later that the company had actually achieved a new third quarter revenue record for the App Store; Apple was especially pleased with a double-digit increase in services driven by strong growth from the App Store in China):

Given his limited reasoning capabilities, we doubt that, if pressed, Rod Hall would be able to analyze his way out of a wet paper bag.MacDailyNews, July 17, 2019

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]


    1. So why would Netflix go up? I logically speaking Apple would be getting so many people to come to Apple TV+ for free that it would have a negative impact on Apple then it would be reasonable to assume some would give up there ever pricier Netfix account.

    1. I don’t think it takes time. His claim is that including free Apple TV+ for a year with each new device will cut the per-unit margins so severely that it will reduce the value of the company by $260 billion within the next year. Ok, so TV+ costs less than $72/year retail, which is far higher than the cost to Apple of providing the service. Even at retail, to cost the company more than a quarter of a trillion dollars, it would have to lose $72 on each of least 3.7 billion new device sales during its 2020 fiscal year, which would represent something like a 1500% increase in sales over 2019. Does that seem likely?

      1. You’re right. I was remembering $5.99, rather than $4.99. My bad. Apologies to all, but that means that Apple would have to sell even more billions of devices for the $60 reduction in profit margin to justify a 26% loss in value for the company. Somehow, I think the extra sales would make up the difference.

  1. If I were Tim Cook I’d really be questioning why my new partner in credit card (GS) has an analyst that’s predicting a 26% downside for my stock….timed exactly on the morning of new launch of iPhones.

  2. The positives I can take from this is that Apple responded very quickly. I think it’s the first time I noticed Apple putting out a statement to a analyst report.

    Apple also contested Google’s hacker team about Safari’s vulnerability very quickly.

    I’m glad Apple’s PR is being more proactive instead of being silent.

    Remember Apple used to say very little, even when Mike Daisey was making false statements about Apple’s labour issues in China . Daisey claimed that he spoke to many child labourers working at Apple factories and was featured in multiple talk shows. He became so famous he was featured in a special show for NPR when an investigation revealed he faked it all, never having even visited the China factories as he claimed.

    “A highly popular episode of This American Life in which monologuist Mike Daisey tells of the abuses at factories that make Apple products in China contained “significant fabrications,” the show said today.

    “We’re horrified to have let something like this onto public radio,” Ira Glass, the show’s executive producer and host said in a blog post today. “Our program adheres to the same journalistic standards as the other national shows, and in this case, we did not live up to those standards.”

    Mike Daisey inspired protests like got 250,000 signatures condemning Apple !!
    All based on his IMAGINATION !

    Apple at that time said ZERO to contest it much less sue Daisey for damages. Later the NYT aroused by Daisy accusation, again using false info won a Pulitzer in a basically facetious set of articles. Apple didn’t even bother with a letter to the editor.

    ( Note that some Foxconn factories in the Apple stories featured in CNBC, CNN, NYT didn’t even build apple devices but were building Xboxes etc for Microsoft ! And the suicide rate at Foxconn was lower than the rate of China in General, lower even than the rate of college students in the USA who were the around same age as the Foxconn workers.

    The ‘child labour suicide causing’ reputation based on this fake news about Apple’s labour issues lingers on today. Apple PR did almost nothing on this big issue and let it fester for a couple of years )

    Again glad Apple is learning from past mistakes.

  3. This is a good thing. First of all, these analyst notes have only short-term effects, so investors shouldn’t worry about it. Time will correct all mistakes.

    Second, the more important thing is that it shows there’s a “Chinese wall” between different areas of an Investment Bank. What people are always concerned about is that one part of the company is helping another. In this case, it’s obvious that Research is not helping Goldman’s retail banking division. During the mortgage crisis, Goldman MBS traders took advantage of investment banking which were putting together the CMOs.

  4. Hall is an idiot. Look at his record. His predictions are wrong more than they are right. A monkey flipping a coin can make better predictions. If someone can get Hall to discuss Apple stock ask him how much money he’s willing to bet that Apple will drop to $165, as he predicted. Not much chance of that happening because Hall is also a coward to face the facts. He’s hiding from the press..

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