Herb, that's a good summary of why the stock has been stuck. (My last post to you was just to get the iMac #1 news up in the "subject" line for people logging in.) I'd add to Rich that the stock got hammered down from $41 right after earnings but right before Greenspan's surprise interest rate cut. It never recovered any momentum after that. Also, sales of the iMac have been slow at Best Buy. Herb Greenberg broke the story, then it spread everywhere, and the shorts piled in, with MM "complicity" tossed in. The thesis appeared to be that iMac sales were slow everywhere, inventory was piling up, and the $1299 price tag was scaring people away. There's even a pesky short on the MF board who claims Apple is going to show a loss either this quarter or next due to this "debacle." Luckily for him, he bought puts instead of shorting the stock.
Anecdotal evidence seemed to indicate that the boxes were still moving well, at least in Apple strongholds like the coasts. But until we got the November data, we had no hard evidence to the contrary. Well, today's news shows that the thing is a big hit, even at the mouth-watering (margin-wise) $1299. December sales should be as strong as November, due to the seasonal factor, so it looks like Apple has put together an exceptional quarter. The PowerBook backlog ended early in the quarter and it appears that the entire G3 stock is a sell-out, as Apple has no shipped every last G3 it has. Jobs already stated that inventory will come in at below-Dell levels again this quarter.
Also, Eric Yang did some great sleuthing (check out his charts on macevolution) and says Apple's cost on the iMac is about $850 and is getting at least $999 apiece even at this late date. No skin off Apple's nose financially if Best Buy blows them out at $999.
I am looking for an early price cut on the machines though. Before the traditional mid-February date.
Marc |
