Why Apple shares took a nosedive

Two analysts say bad things about Apple and the price drops a lot. Then the next day analysts say good things about Apple and the price is up $8 dollars today. So I guess Apple’s stock price has nothing to do with how the company performs and all to do with how the analysts rate Apple day to day. If I could only know what the analysts were going to say the day before they wrote their articles I would be a rich man.

Saying that Kathryn Huberty is a qualified Apple analyst is akin to saying that Helen Keller had keen eyesight. If accuracy in her economic forecasts is not a requirement for her continued employment, what is? What does she do so admirably for her boss that he considers her indispensible? Is Morgan Stanley doing so well they can continue to hire economically-challenged analysts? Did anyone ever consider that maybe it is idiots like Huberty and their inattentive bosses that have caused this current economic mess?

WOW! Thanks for the Props. Can you get me a job as an analyst? Let me replace Katie Huberty and things will go more smoothly.

Anal-ists, are WRONG 99% of the time! They don’t have a clue about Apple’s business. And how many quarters have ANAL-ISTS missed Apple’s real earnings numbers that were better than expected on all counts. They are still in the 90’s with that same old attitude that Apple is a niche player.
They never take into account that Apple has ZERO debt, and 20 BILLION dollars in the bank just collecting interest! Apple is the most innovative company on the market and all the products it sells speaks highly of that in many ways.

Why hasn’t Google, Dell, HP, and others taken a dive like this? They have nothing new to sell, no innovation, there cutting back on R&D, like they had any to begin with. Apple has a very strong product line that no other company can match. And now that Vista is a TOTAL FAILURE, Apple really has no competition. This should be an indicator to BUY, BUY, BUY, more Apple stock if common sense had any meaning.

Typical market slapping Apple for NO REASON WHAT SO EVER PERIOD!!

“ex ped: I stand multiply corrected. This is why I don’t play the market.”

This is why i read this blog. How much grief could have been saved if banking folks could have mustered the character to make such statements over the past decade?

I don’t know who this Kathryn person is, or what she has achieved, but anyone who cuts one third from their estimate on the value of a company in one day fails to inspire my confidence in their judgement.

It is a stark admission that their previous judgement was +/- 30%. In other words, junk. Hot air. So, you know, keep listening folks!

Anyway, moving to the fortunes of Apple in a crash, let us consider a basic principles. First, cash. Apple has bags of it. Apple is not a company that has been riding thin margins and playing funny money with shady banks to expand or die. Apple has bags of cash, and in a crash, cash is king.

Apple also has cash flow. The religion will not perish even if folks starve in the streets. You’ve all seen the crazies at the store openings. These folks, and hordes like them, will sell their children to the gypsy circus in order to raise the cash required to buy the latest model iPhone.

So in a crash, I can see companies like Apple doing very well. As numerous smaller and less cash rich firms go to the wall, their valuable assets will be ripe for the picking. It will be a buyers market, for technology, staff and market access.

And how many buyers will there be, aside from the cash rich Apple?

Microsoft will feel the pain of meltdown more than anyone. their market is precisely the shower of filth who will soon be jumping from the tall buildings, and if they have any dignity left, taking their spreadsheets and their cheap OS with them.

Google? HAH! Go Google “advertising budgets during economic collapse” and see what you discover.

So I think Apple is looking stronger than a pig with a sore tooth. Stevie wonder is mr cash money fantastic, and the trash are leaving the store.

How is it that a company that is in serious financial strive, loosing 42% stock value in Sept can be taken seriously? Morgan Stanley needed a financial red cross package to keep it alive yet it’s down grading one of the strongest Apple stocks in it’s history led to an Apple stock dive. Are they just wanting to take everyone down with them? If her comments weren’t actually doing damage they’d be laughable.

This is just truly bizarre situation.

* Selling Short.

Plus- you can’t blame the short sellers. Blame the automated stock machines on the web. Keywords and recommendations from people like this cause a widespread hit to any stock that receives negative attention. Look at what happened to the stock price of United Airlines (UAL) earlier this month.

You say:
“Investors at The Mac Observer’s Apple Finance Board, who tend to be bullish on the stock, blamed the price collapse on short-sellers who dumped Apple shares to cover their positions before any news on the bailout comes out.”

Shows a total lack of understanding of what short sellers do. When short sellers need to cover theeir positions – they need to BUY not sell. The already sold more than they own – to cover they need to buy!

JMMX-

He is referring to the losses from the market in the past two weeks. Since they know there would be a collapse of stocks of all kinds, they were covering their position by making up for their losses.. He was not referring to the process of selling hosrt.

Kathryn Huberty is an idiot and the worst analyst covering AAPL. She’s in the pocket of all these big money short-sellers.

I bet he pounded that article out sobbing over hir girly overpaid mac keyboard. Either that or foaming at the mouth at how dare these analysts to their job.

Either way, Apple FanBoi’ism/aplogists have no place in Finance.

Someone tell me why analysts are allowed to voice their opinions publicly.

They are privately employed by financial institutions to advise and benefit their employer, not the public.

Who is to say that the projections the public hear are the same one that they give their employer?

P.E.D.:
Apple’s fiscal year 2008 runs from September 30, 2007 to September 27, 2008.
From:http://www.apple.com/investor/

From the FAQ section. The quarter ended last Saturday.

ex ped: Right you are. Thanks.

I don’t see the phrase “cover their positions” in the article. They could be dumping (which means selling) shares to take advantage of the downgrades. In other words, they are starting positions, not covering.

ex ped: I stand multiply corrected. This is why I don’t play the market.

Actually, short sellers of *other* stocks are likely to need cash to settle margin calls.

To do that, they need *cash*, and are likely to sell mediocre-performing stocks that they have been holding for a while.

So, the short-seller issue is only indirectly linked to Apple performance.

Agreed. It’s not the shorters fault. If they dumped shares, they would be opening a short position. When they decide to “cover” or close their positions, they buy the shares back, providing a bump up for the stock price. Some people call this a short squeeze which tends to be beneficial as it provides an extra pop. All in all, your statement makes no sense.

You say:
“Investors at The Mac Observer’s Apple Finance Board, who tend to be bullish on the stock, blamed the price collapse on short-sellers who dumped Apple shares to cover their positions before any news on the bailout comes out.”

Shows a total lack of understanding of what short sellers do. When short sellers need to cover theeir positions – they need to BUY not sell. The already sold more than they own – to cover they need to buy!

“…blamed the price collapse on short-sellers who dumped Apple shares to cover their positions…”

This makes no sense, shorts would need to buy to cover positions and a mass coverage (opposite of ‘dump’) would make the price rise.

> blamed the price collapse on short-sellers who dumped Apple shares to cover their positions

Uh, no. When short sellers cover their positions, they *buy* shares. That makes the price go up.