<Related News> iMac therefore I make money.
Valeri:
Say thanks for the thoughts on Russia,by the way what happened to Vladimir Posner,you heard of him haven't you?
Here is a story about Apple's turnaround.
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(courtesy Bloomberg)
Those Who Predicted Apple Would Tank Now "Think Different"
New York, Oct. 13 (Bloomberg) --
When stock analyst Louis
Mazzucchelli recommended buying shares of struggling Apple Computer Inc. in November 1997, an institutional investor who heard the recommendation called him a ''moron.''
At the time, Apple interim Chief Executive Steve Jobs was battling to stop seven quarters of losses totaling $1.8 billion, and few investors thought the company would come out of its death spiral, even if its charismatic co-founder was back.
Things have changed. Apple is expected to report its first annual profit in three years on Wednesday, making Mazzucchelli a hero to investors who followed his advice to buy the shares. The stock has doubled since Nov. 6, when Mazzucchelli recommended it.
''Everybody had written Apple off as dead,'' said Mazzucchelli, 42, who's been in the investment business for only two years at Gerard Klauer Mattison & Co. in New York.
Mazzucchelli plans to beat an Apple event on Wednesday, when Jobs himself will provide details about who's buying its new, hot-selling iMac. The sleek computer is designed to get first-time users onto the Internet in minutes.
''It's unusual that (Jobs) would do this, so it must be good news,'' Mazzucchelli said. The company also is expected to unveil a new operating system for its Macintosh computers.
Apple is forecast to earn 49 cents a share in the fourth quarter that ended in September, according to First Call Corp. That compares with a loss before charges of $24 million, or 19 cents, a year ago.
Turnaround
While some investors called Mazzucchelli names, others listened, and a few started buying Apple shares.
''I couldn't find anyone who really knew anything about the company,'' said Catherine Ryan, a portfolio manager at David L. Babson & Co. in Boston which owns 1.1 million shares of Apple. ''Lou's the only analyst I talk to'' about Apple.
At least two other analysts spotted Apple's recovery early on. Daniel Kunstler at J.P. Morgan Securities in San Francisco raised Apple to ''long-term buy'' in August 1997. He didn't go to an unqualified ''buy'' until July of this year.
Keith Bossey at Robert M. Cohen & Co. in Great Neck, New York, put a ''speculative buy'' on the company in July 1997. He cut the company back to ''neutral'' a year later.
Mazzucchelli has been the biggest table-pounder for Apple. The analyst, who worked in the computer industry for almost 20 years before going to Wall Street, started following Apple because of the strength of its brand, and the legions of customers who wouldn't give up their Macintosh computers unless the machines were ''pried out of their cold, dead hands.''
Mazzucchelli put a ''buy'' on Apple after the company fired its old board and introduced a new line of powerful Macintosh machines. For a few weeks afterward, he felt like a moron: Apple shares dropped 31 percent by end of the year.
Other analysts remained skeptical about the company. Lehman Brothers' Kimberly Alexy said in November that ''profitability remains elusive,'' rating Apple shares ''neutral.''
Even worse, Standard & Poor's cut its credit rating on Apple a month before, citing the company's ''ongoing revenue declines and operating losses.'' Weak market share and higher development costs made it difficult to compete with rivals, S&P said.
Jobs the Man
Then, the picture brightened. Jobs got on stage at MacWorld Expo in San Francisco in January and told his loyal followers that the company's first-quarter profit would be more than $45 million, far better than the loss that most analysts expected.
''You can imagine the relief I felt,'' Mazzucchelli said.
Apple shares climbed after that, hitting a record 43 3/4 on Aug. 19. They've slipped since, along with other computer shares, amid concern that slower economic growth could hurt sales. Apple rose 2 5/16 to 37 7/16 yesterday.
Mazzucchelli may have seen the turnaround at Apple coming before other analysts because he was so new to Wall Street. He hadn't suffered through years of disappointing earnings when Michael Spindler was running the computer maker. To Mazzucchelli, Apple was a great company that had fallen on hard times.
The Rhode Island native also knew something about computers. He graduated from Brown University with a self-designed concentration in artificial intelligence in 1977.
After a stint making machines used to test communications equipment, Mazzucchelli spent a summer in Newport, Rhode Island, designing navigation computers for racing yachts. His computer served on a French boat in trials for the America's Cup in 1979 before officials ruled that the devices had to come from the same nation as the boat. Mazzucchelli took the ruling as a compliment.
Entrepreneur
He spent the next three years working as a computer consultant, where he got an idea for a software product that prompted him to start Cadre Technologies Inc. in 1982.
The product, a tool to design advanced software, sold well in its heyday. Lockheed Martin Corp. used it to design the avionics in the F-22 fighter jet, and Federal Express Corp. used it to build its computerized package-tracking service.
Mazzucchelli says he got bored after 13 years at Cadre. He also got bumped down to chief technology officer from chairman after a merger with another firm, speeding his exit.
After two months in the Advanced Management Program at Harvard Business School, Mazzucchelli found a job posting on America Online for an analyst position at Gerard Klauer Mattison.
He still has a ''buy'' rating on Apple, and he thinks the stock could go to $50 a share.
The iMac, ''is an out-of-the-park home run,'' according to Mazzucchelli. The machine is selling so well that Apple can't keep up with demand, the company says.
One other thing tippedMazzucchelli to Apple's success: He still loves his 10-year old Macintosh. Like other Apple users, he won't give it up for anything. |
