Steve Jobs Reassures Employees and Investors

[Arnold Ziffel]

Enron, Schmenron!

Comparing Apple to Enron is despicable. Enron was a corporation built upon lies, deceit, and quicksand. Apple is a successful, growing compan, which is producing cutting edge products its competitors would kill to have.

The things goobers say to spread FUD!

 

[stealthman1]

Downturn in the economy? Recession? Get a clue, the economy is on the way up. Bush, with Congress's full support are going to make another monumental fiscal mistake to cover Greenspan's and Bernanke's asses and only a few of the pigs who needed slaughter are going to get it. If there is to be an economic meltdown, what's going on now, in the face of a teeny bit of turbulent water is going to be the cause. Just wait till the Social Security runs out...2017 IIRC, just around the corner.

 

[Shayne]

People can argue that the whole market is down, and it is, but I'm fairly certain the whole market isn't down YTD ~30% (checks rest of portfolio to confirm). AAPL being down could simply be a market correction for a stock thats been over hyped for the past couple year? Stong growth starting to level off some? Hard to say really.

 

[rtdunham]

Stock price has little to do with actual performance. There was no real reason for it to be as high as it was. Stock price also has very little to do with past performance. These are common shares, pretty worthless in the end, and manipulated by powerful people. Y'all should've sold at $160, hell I got out at $80 after quadripling my money.

So YOU bought common stock though it's "pretty worthless in the end"? And although your buying at a lower price and selling at 80 was a justifiable act for you, others buying now or selling now, at higher prices, isn't? Remember, they're making those decisions based on today's factors, not the ones that motivated you to buy at $20. Besides: you sold a stock at 80 that quickly soared to nearly 200. Maybe you should have sold at 160.

I think your analysis is oversimplified. I don't think much "manipulation" goes on "by powerful people" on a stock with as many shares in as many hands as AAPL. You say "there was no reason for it to be as high as it was". I'd argue there was, based on the expectation that future quarters would continue the level of growth it had experienced recently--it was a price based on future expectations, not past performance. Though the quarter just ended yielded robust results, the company's outlook for the present quarter wasn't so rosy, so the price declined. If Apple again beats its estimates and analyst expectations at the conclusion of this quarter, the stock will go up; if projections for the next quarter are favorable, it'll go up--or vice versa--but the stock's moves up or down will be due overhelmingly (general worldwide market conditions aside) to the company's performance, not manipulation.

 

[rtdunham]

We're all used to Apple's stock dropping a bit after announcements of new products (due to Jobs' remarkable ability to offer us cool stuff while still disappointing us), but it's really tanked since the MBA announcement. Any theories as to why?

We get caught up in fancy hardware. But I thought at the time the important announcement at MWSF was not the MBA, but the new TV software and the rental scheme and the availability of movies-to-rent from all six major studios. I saw a related item today that apple's making uncharacteristically little profit on the tv itself. That can only be because it's investing to build a nation's reliance on its hardware/software/retail movie scheme the way it built one for the music business. Could be wrong, but that's my view. Think how many prospects there are for MBAs, compared to the market for a convenient, reliable, appropriately priced method of viewing movies at home. The MBA market pales in comparison, whether or not it proves to be a hit. I think once the apple TV software's released and the studios' movies are in place we'll see aggressive advertising for that new segment of the company's business.

 

[thecritix]

he'll have to do iphone 2 now,
If he doesn't he'll risk not meeting 10 million iphone sales..

Jobs will now want to smash that 10 mil, expect a better iphone, possibly cheaper?

hope so anyway

 

[eastcoastsurfer]

Being debt free is hard for any company but to be debt free AND 18 Billion up in hard, cold, cash is amazing. That is GREAT financial management.

No it's not! I invest in Apple to do what Apple does (design and sell electronic devices), not manage my finances. I think we can all agree that Apple needs to be spending that money on R&D, engineers, etc... A company like Apple sitting on a lot cash scares me. Does it mean they are out of ideas to spend it on? The latest MWSF sorta confirms they are...

 

[akm3]

Anyone who sells right now is a moron. The market always trends up over time.

The MARKET always trends up, individual companies come and go.

I don't believe Apple is in trouble though, with $18 BILLION dollars cash and zero debt. I'd say they could weather some pretty intense storms.

 

[MikeTheC]

While many of us nit-picked the recent Stevenote, frankly the obvious, undeniable truth is that Apple is in as fine a condition as it has ever been in the history of the company, even in the heydey of the Apple II and the original hey dey of the Macintosh back in the mid-to-late 80s. In fact, the company's market position and strength dwarf where they once were.

Anybody who is panicky about Apple's future or continued viability is retarded.

 

[digitalbiker]

I think a lot of this has to do with a rapid investment in AAPL stock due to speculation on unrealistic future gains. Now that the rapid gains are slowing and are not expected to be as great in the near future, investors are bailing.

Also I think many investors look at the $18 billion in the bank as a negative. Most feel that this is too much cash on hand not doing anything. If AAPL is such a great investment and has such a great future, why are they not investing the cash in either 1) themselves; buying back stock, 2) encouraging future investment with a dividend to shareholders, or 3) Investing the cash in more R&D. Why sit on cash and fritter it away paying corporate taxes.

 

[Xtremehkr]

Steve's right, Apple is fine. With the economy as uncertain as it is, a lot of investors are just playing it safe. Money is being moved to investment areas that are considered safe harbors in times of economic uncertainty. The returns aren't great but people feel safe that they aren't going to lose too much money. When the economy rebounds, so will Apples share prices.

 

[HawaiiMacAddict]

Hi, I'm an analyst... Let me get some put options on AAPL and tomorrow I will talk trash about it to make myself a fortune and then buy more shares once I make them go down by the power of my words and blame it on a "recession"

Aloha MacFly123,

I don't know very much about options, but think you're stating the opposite of what you should be doing, unless you think AAPL is set to plunge down even further. If you go to Stock Charts and plug in AAPL, then choose to view CCI, Full Schotastics, and Williams %R, you'll see that this is an excellent time for a CALL option, not a PUSH option. In other words, and please correct me if I'm wrong, a call option is purchased when the market is perceived as moving up in the short term, and a put option is purchased when the market is perceived as moving down in the short term.

I will be purchasing some AAPL stock this week, and possibly a call option - I'll have to wait on the option to see what it does over the next few days, but if I buy a contract, will buy one with an expiration date at least 6-12 months away. That way, I can either purchase 100 more shares at the option price or sell it to someone else.

As I mentioned above, I am really a n00b at investing in the stock market, so please correct me if my understanding of call and put options is incorrect. I will still purchase AAPL stock and continue to support Apple - as a switcher since August 2006, I am constantly amazed at the quality of Apple's products and ashamed of my reticence to consider them any earlier.

HawaiiMacAddict

 

[MacFly123]

Aloha MacFly123,

I don't know very much about options, but think you're stating the opposite of what you should be doing, unless you think AAPL is set to plunge down even further. If you go to Stock Charts and plug in AAPL, then choose to view CCI, Full Schotastics, and Williams %R, you'll see that this is an excellent time for a CALL option, not a PUSH option. In other words, and please correct me if I'm wrong, a call option is purchased when the market is perceived as moving up in the short term, and a put option is purchased when the market is perceived as moving down in the short term.

I will be purchasing some AAPL stock this week, and possibly a call option - I'll have to wait on the option to see what it does over the next few days, but if I buy a contract, will buy one with an expiration date at least 6-12 months away. That way, I can either purchase 100 more shares at the option price or sell it to someone else.

As I mentioned above, I am really a n00b at investing in the stock market, so please correct me if my understanding of call and put options is incorrect. I will still purchase AAPL stock and continue to support Apple - as a switcher since August 2006, I am constantly amazed at the quality of Apple's products and ashamed of my reticence to consider them any earlier.

HawaiiMacAddict

You are not wrong. I think you just didn't detect my angst. I was acting as if I were an analyst and explaining how they manipulate the market with their reports and make fortunes in doing so. In other words, they would buy put options, then the next day trash the stock so that it does go down and they reap the benefits and then the inverse and so on, etc.

 

[JonasLondon]

I'm completely with you, with a preference for a buyback plan. Their stock has way outperformed just about anything else they could have their cash in. $18 Billion is an absurd amount of cash to sit on, it's actually a drag on their stock value.

Yes and no. I am quite happy to see AAPL hold on to this amount of cash at the moment. Managed in a sensible way, this alone yields enormous funds through dividends/interest, money that can be put to use to open retail stores (which by themselves may not bring in THAT much revenue, but based on my own experience, the London Regent Street shop brings in so much fresh blood to the Mac community, it's insane. It is one of the best shops in the street, open, friendly, layout, good people (most of them are very friendly and knowledgeable), and people go there to check out gear and make a decision, then go home and order it online (more convenient than lugging a 30" screen across London, let me tell you)).

If they could only start opening shops in Australia, New Zealand, Germany etc., so many more people would be (re-)introduced to Apple as a brand of high-quality computers. You wouldn't believe how large the percentage of people is who don't have Apple on their radar, yet it is sooo easy to show them why a MacBook Pro or an iMac rocks. Even my dad, who never made an Excel sheet during his business life, is now doing kick-ass Numbers spreadsheets that look the part for board meetings of a Norwegian company, exporting them to Excel and PDF just as easily.

Apple computers is the new iPod people. Forget stagnating iPod sales, Apple computers taking 10% market share in 4 years, that's what we should be looking for!

And then we have AAPL around $300.

J.

 

[JonasLondon]

Aloha MacFly123,

I don't know very much about options, but think you're stating the opposite of what you should be doing, unless you think AAPL is set to plunge down even further. If you go to Stock Charts and plug in AAPL, then choose to view CCI, Full Schotastics, and Williams %R, you'll see that this is an excellent time for a CALL option, not a PUSH option. In other words, and please correct me if I'm wrong, a call option is purchased when the market is perceived as moving up in the short term, and a put option is purchased when the market is perceived as moving down in the short term.

I will be purchasing some AAPL stock this week, and possibly a call option - I'll have to wait on the option to see what it does over the next few days, but if I buy a contract, will buy one with an expiration date at least 6-12 months away. That way, I can either purchase 100 more shares at the option price or sell it to someone else.

As I mentioned above, I am really a n00b at investing in the stock market, so please correct me if my understanding of call and put options is incorrect. I will still purchase AAPL stock and continue to support Apple - as a switcher since August 2006, I am constantly amazed at the quality of Apple's products and ashamed of my reticence to consider them any earlier.

HawaiiMacAddict

"PUSH" should read "PUT", andif you're a n00b at investing, maybe stick to the stock before you go into calls and puts. But in somewhat simplified terms, if you believe a stock will go up, instead of buying 3000 worth of AAPL stock, you could get 300 worth of CALL options (1:10) and as long as they remain "in the money" (the price they are based on is below AAPL's current price) and have a long time before they expire, you may see a profit similar to holding on to the "real stock". But please, read up lots and lots about this before you do any of this, and don't hold me accountable if it turns sour for you ;-)

Happy investing! I certainly agree that 3,000 into AAPL just now will probably buy you a MBA in a year from now. Unless the world's market collapse completely and the dollar hits extreme lows ...

 

[JonasLondon]

I think a lot of this has to do with a rapid investment in AAPL stock due to speculation on unrealistic future gains. Now that the rapid gains are slowing and are not expected to be as great in the near future, investors are bailing.

Also I think many investors look at the $18 billion in the bank as a negative. Most feel that this is too much cash on hand not doing anything. If AAPL is such a great investment and has such a great future, why are they not investing the cash in either 1) themselves; buying back stock, 2) encouraging future investment with a dividend to shareholders, or 3) Investing the cash in more R&D. Why sit on cash and fritter it away paying corporate taxes.

Rest assured they're already doing "3)". But I agree, maybe they should spend a bit more on it, as we eagerly await Aperture 2.0, maybe a pro iWeb application to rival Dreamweaver(?), and of course "Phenomenon" (aka Shake on steroids in a Motion-like user interface with probably Color integrated as well).

off-topic/btw - for those who haven't looked into Color as part of the FCS package - yes, it is a weird interface coming from FCP, but oh boy is that software powerful.... I really want to get into Video-Editing now. Watch a few podcasts on technology you don't really know yet, it can be so amazing!

rules

 

[eastrow]

Thoughts on APPL stock

The market is driven by fear, greed and stupidity. Right now investors are scared out of the their mind (a generalization). The media is feeding that frenzy and large industrial traders are making a killing by fueling the fear and selling stocks short.

Apple is, and will always be more volatile than the market as a whole (anybody remember when aapl was down to $50 this summer?)

I believe Apple has a great current product line - Macs are growing like crazy, ipods and making the transition from MP3 players to multi media/internet devices. People are calling for an Apple tablet - take a close look at the the iTouch and the direction that Apple is taking the platform. It could be the tablet is something that isn't announced, but simply appears.

iPhone can easily become a full product line - just a phone w/internet, phone w/ internet a gps and phone w/internet, gps and mp3 capabilities.

The Macbook Air - the start of a new line in the laptop inventory. BTW - has anybody taken a look at the top 20 selling laptops on Amazon - last I checked MBA was in the top 10! Also, start to consider all the neat dongles/packages that will be available from third party accessory manufactures in the near term. (All of which will be easily transportable).

What would make me a happy - an announcement of a buy-back - I Apple truly believes that their stock is undervalued, a repurchase would prove to be a huge windfall to stockholders. Imagine aapl is heading back to $180 - a billion dollar buy back would result in and additional 300-400 million in cash for stockholders.

 

[gnasher729]

Also I think many investors look at the $18 billion in the bank as a negative. Most feel that this is too much cash on hand not doing anything. If AAPL is such a great investment and has such a great future, why are they not investing the cash in either 1) themselves; buying back stock, 2) encouraging future investment with a dividend to shareholders, or 3) Investing the cash in more R&D. Why sit on cash and fritter it away paying corporate taxes.

I learnt this from my previous boss, who built up a company from zero to about a billion dollar: If you have lots and lots of money in the bank, that is a very very good place for it. He let himself be talked into buying companies for a few hundred million dollars, three went bankrupt, one made tons of money, he came out just about even. With hindsight, it was a stupid thing to do, leaving that money in the bank would have made about the same profit at much much less risk.

Your points (1) and (2) take the point of view that the purpose of a company is to increase the share price. My view is that the purpose of a company is to increase its value; quite a different thing. And Apple is very good at that.

More cash into R&D? There is only so much that you can do. You can't just take a billion dollars and put it into R&D, not if you want anything useful out of it. You can't just buy good developers. You have to find them first. You can buy a thousand mediocre ones, who can build mediocre products that don't sell, no problem. But you can't buy good ones.

 

[gnasher729]

"PUSH" should read "PUT", andif you're a n00b at investing, maybe stick to the stock before you go into calls and puts.

My favorite quote about options: Trading options is like riding a bicycle - it is easy to learn, and it is fun - until you are hit by a garbage truck

 

[dongennl]

Want stock price up? -- open up OS X

Picture it....

... Apple has loads of cash, good fundamentals and a low stock price...

... hello private equity?!? See the opportunity?

If only someone took control of Apple through the stock market and opened up OS X to all (or at least a limited 'approved' set of x86 machines) this company could become as big as (or bigger, as their products will actually be GOOD) you-know-who. (and unlike linux, this OS has Office, iTunes, Adobe, and loads of other commercial apps)

Steve's good, he's really got vision, but on this 'our hardware or no way' thing he is really wrong.

Think about it. Think what Apple could achieve with 10 times more money coming in.

Apple's hardware is so beautiful and cutting-edge that their HW business will survive, in fact it might grow as OS X market share rockets. Leave the corporate grey boxes and cheap consumer PCs to people who do that well but deliver us from this Vista crap!!!
(Hello IBM??? you gave us MS, time to clear up your mess, team up with HP).

 

[pubb]

Filemaker. They could fake the profits, they control their own records. And yours.

Pubb

How many subsidiaries does Apple have? [snip] All there to produce fake profits.

 

[eastcoastsurfer]

The whole reason the stock has tanked is part market, but mostly that iPod sales are slowing. When Apple renamed itself, they could've just called themselves "The iPod Store". That's where their crazy success has stemmed from. They are getting some sell through to other products because of the iPod and I think it will continue, but they will not sell computers at the rate they have sold iPods. And, iPod sales will continue to slow as most people who want one, have one.

 

[ScottFitz]

It's all perspecitve. If you bought at 200, the stock is tanking. If you bought at 20, you're stilll rather impressed with your decision.

I primarily invest in real estate. I understand it. I can go stand in the yard. I know what that market is doing and why it reacts the way it does.

I admittedly do not understand the stock market. I'm the logical kind of person that "knows" there's about to be a huge announcement on some record profits and I would think that now is the time to invest. Invariably, the price goes down after a huge successful announcment like that. What I think should happen logically is often 180 degrees from reality.

Hence, you have to use a broker you trust or you don't invest.

 

[DTphonehome]

My favorite quote about options: Trading options is like riding a bicycle - it is easy to learn, and it is fun - until you are hit by a garbage truck

Wow is that ever true!

 

[gkarris]

Apple is going to have a tough year...

Let's get real here.

Apple products are mainly consumer (iPod, basic Macs), and creative professional (Mac Pros). They really don't have business products to keep them afloat during hard consumer times.

I have friends and people at companies I used to work for who are being told/or have just been laid off. Jobs are still being shipped overseas.

People just don't have the money to spend on fancy iPods, or upscale computers (Macs). People have also figured out that Apple products last longer, so the Mac they bought 3 years ago is just fine for the tasks (my iBook G4 is still going strong).

The same with the iPods. How much of the Classic 80 Gig can an average person fill? People are really happy with the Touches, do you think they'll "upgrade" to a Zune? People won't be buying new iPods year after year.

Will someone splurge for the new Mini or buy the cheaper AppleTV to use to watch videos and keep their old Mac (that won't play the new video files) for other things?

Bush's "cure" is to give us tax refunds of $600 each. Does he think people are going to go out and just spend it on stuff we don't need? I personally need new tires for my car - so that's were it's going.

So, let's say, someone decides to finally update their old computer and use the refund. $600 for a MacBook is not going to cut it, people will be settling for the cheap $450 basic laptops and spend the rest on bills...

Apple will weather this storm - they always have in the past. When others were saying "throw in the towel" or "Apple is going out of business", they've always proved everyone wrong.