Re: Today's Drop -
I've been closely watching AAPL's price movements before, during and after MW Expo's for a long time now and have come to some conclusions (which led me to sell at the close on Tues. - quite accurately!).
There were NOTEABLY *NO* hints in the keynote about the extent of the quarterly profit; people are at the point now where they view this negatively... however in doing so they neglect the fact that Apple in the recent past has made deliberate attempts to "guide" estimates a bit low so that the actual earnings PR turns out to be a surprise and thus boost the stock (at least for awhile).
The big news is (almost) always in the keynote; it takes very little time now from its end until institutions execute resultant buy or sell orders, so price movement (if any) between 3:30 and 3:50 pm pretty much determines what happens the next day (at *best* the price peaks at the open the next day but gradually declines from there on out - the disadvantage of being an "emotional" - and relatively volatile - stock).
The fact that iMac will now come in 5 flavors does not excite investors (although it *should*, as this will spur sales quite a bit - yes, the idea IS to encourage a couple's "interior decorator" to choose the 'puter based on impulse and color scheme!), nor does the fact that hoards of OTHER companies are now producing add-ons for Macs (they generally don't add to Apple's bottom line in a direct sense). Connectix's PlayStation emulator doesn't work with ALL PS games (necessity of consumers having to research which will work & which ones won't = effort and expectation of confusion & frustration = no appreciable increase in sales of G3's as gaming machines, at least as far as "the street" is concerned).
Although *we* tend to see Apple as a very broad-based company, most of "the street" sees it as a computer hardware manufacturing concern. Thus, things that don't *directly* add to the company's bottom line aren't (at least initially) seen as justification for increased valuation of the company - in some respects this is quite the opposite of the " 'net" stocks. And if "the street" can't figure out how to calculate the value of, say, QuickTime to Apple, well then it just doesn't really enter into their calculations either...
The perception that Apple is gaining market share somewhat is real, just as the perception that it isn't making alot of money per unit shipped is. And *if* Apple, known in the past to UNDERESTIMATE its production needs, now finds itself OVERESTIMATING them, this could only create doubt and therefore have a significant negative effect on the stock's price.
My best guess is that the stock could dip a little further between now and Friday, but then gradually creep up a bit until the earnings release... if there's no upside surprise in the bottom line we slip back to 40 or below; if there IS an upside surprise, well, SHORT SQUEEZE time again...
Finally, we should keep in mind that Apple is now at the stage wherein it is generally more desireable to ditch the volatility of its stock. If efforts to accomplish this are too aggressive the stock would nosedive, so deliberate efforts are now made to do it gradually - and we are now seeing the beginning of the results in this regard.
Sorry for the ramblings! |
