Apple Shares on Sale Ahead of Quarterly Earnings Announcement

Wall Street greeted Barack Obama’s inauguration as the 44th president of the US by shedding more than 5% of its total value Tuesday. Some might interpret the market action as a vote of no confidence in the new administration, others likely view the dip as an indication of challenges ahead for the US economy and still others would say the market for stocks acts as any market with excess inventory on hand – by putting things on sale.

The sale price for shares of Apple (AAPL) closed Tuesday at $78.20, the cheapest price the stock has seen in over two years, more than 60% off its all-time high of $200, set in December 2007. One of the most widely followed Apple analysts, Gene Munster of Piper Jaffray affirmed a price target of $235 for Apple stock as recently as December and today’s price action, coming just one trading session prior to the company’s quarterly earnings announcement, would seem to be Wall Street’s equivalent of a one-day red tag sale.

So what do you think? Is Wall Street giving potential Apple shareholders a gift, or is it trying to unload damaged goods while it still can? Can a guy like Munster, who follows in minute detail every financial move the company makes, who reports, often with uncanny precision, what Apple’s revenue and profit numbers will look like before they are announced to the public, can he seriously set a price target 200% above the stock’s current value?

What I know is that a year ago, after the market had knocked AAPL down from $200 to about $140, I wished I had some money to put into the stock, because I loved the company and its products, and I thought its prospects for the future were great. I know that six months ago, when the iPhone 3G came out and the AppStore launched with the stock trading at $175, I wished I had some money to put into the stock for the very same reasons.

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Today, I know I’m kind of glad I don’t have any money to put into the stock because I still love the company and its products, and I still believe its prospects for the future are great, but it seems sometimes that’s not enough to make money in the stock market.

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About the author

Lonnie Lazar is a writer-musician-web designer-attorney. He writes about Apple for Cult of Mac and Mac|Life, and about VoIP and telecommunications for Voxilla. Follow Lonnie on Twitter @LonnieLazar, join the Cult of Mac on Facebook, and find Lonnie's photos on Flickr.

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Posted in Apple, Opinions |

http://www.sushiya.de/sushi Alexander
I think, the problem is to take the stock market as a barometer for mood of people or economy – so the very question is the problem.
How can we as a society take the stock market as the greatest measure for success? it reminds me in certain terms of the inauguration speech of obama – and i think we generally have to rethink that stock market stuff. Companies who gain value when they fire people… apple has been very much profitable from the stock market in recent years, but look now – everybody is buzzing about the health of steve jobs and uses the “he should have told shareholders because its their money!” argument to digg into his private life. its unbelievable. you can only do so, if you have no confidence in yourself to find good solutions, make good products, that apple has a lot of good people now and that steve jobs has more than earned to take whatever time of leave he just wishes to – and let the stock market be the stock market. If apple is up, we are happy and if not – they still have provided us wiith great products, so lets face on the products solely, on the things we can do with them and wish steve best time he has, cause he earned it and he has been taken quite some time of the company before.
Dont try to make money on stocks and search somebody to blame if it doesnt work. try to get to contribute something yourself.
I know its hard to think in that direction with our 24hours news networksand such…
Lucas
i have to agree with Alexander to a great deal. folks have put too much ‘stock’ in one man. and the trouble is that the media fueled that flame. instead of putting the focus on the team, the media (including many so called Apple/Mac fan sites and blogs) harped on the whole Steve Jobs thing. those were the places that should have been reminding folks that Apple is a team effort, that it is the product that is the true power of Apple and not one guy who looks good up on stage. that Steve corrected the mistakes of the past by hand picking his team much like a new US pres picks his cabinet. that the people around Steve are more than capable of running the show.
these so called Mac sites could have chosen to point out what Steve and his team have accomplished during his so called ‘dying years’, but instead they played party to a media circle jerk of “so and so is reporting that Steve Jobs is on his death bed” and “X other site that is not us is saying that early retirement is a done deal because Steve Jobs is sicker than he’s led folks to believe” and a personal fav “Apple may be under investigation for the Boards refusal to disclosure Steve Jobs true health status” (despite the fact that such a disclosure is actually illegal under several US laws)
shameful really. Because all this has put Apple in a position where a few loud mouth so called experts can de value the company such that only the biggest product release known to man could have a shot at doing anything to restore confidence (and i’m talking every product revamped and/or at 30% off the old price scale)
Ras
Whether or not you should buy into a stock today is a lot more than just Steve Jobs’ health (and I agree that the obsession of some on this is a lot sicker than Jobs is). And unless you have parts of steel (and a lot of discretionary capital) you shouldn’t try to go for tops or bottoms. I first bought stock in AAPL in 1988 (and that was a wild ride), and added to it last March and then this January. Sure the March purchase is “under water” at the moment, but my assessment is that a price like 150 or greater is not out of line when the market overall settles out. Overall, though, AAPL has STILL been very good to me.
Did I buy the stock BECAUSE it had Insanely Great Products? No. But I LOOKED at it because I liked the products, and even if it wasn’t a “sure thing” I could tolerate the risk of adding AAPL to the group of about 12 stocks that I invest in (along with index funds, bonds, etc.)
There was a time when AAPL was trading at or just below the “book value” which meant that even if they liquidated the company (as Dell infamously suggested later) that land, buildings, and cash on hand would guarantee that you wouldn’t lose very much (and that I would expect that intellectual property would have covered the “intangibles” part of the book value). I couldn’t buy then (no spare capital), but some of my family and friends did on the basis of my recommendation. They all sold after making 2-4 times their investment. They should have held (the price was something like $3 a share compared to today if I recall).
The big thing to remember about any investment advice: YOUR MILEAGE WILL VARY.