Apple, on foot of recent Q1 numbers which were seemingly 'below expectations' and which you can read about by scrolling down this blog, means their share price is slipping.
It's -11% since April 26th (-27% over the year). An 8 straight day decline and this hasn't happened since 1998.
Sales in China were also -26% so investor confidence is a bit rattled with headline investor Carl Icahn, dumping his stock and adding to the downward pressure.
Tim Cook was interviewed yesterday to rally support and as he points out, things are still pretty good at Apple.
Q1 had 50 Billion+ in revenues; 10 Billion in profits. "No one else is earning that" he said, "Last year we earned 53 Billion in profits and I think the number 2 company was 24 Billion". He also talked about "great innovation in the pipeline" and if you looked at China on a two-year basis, "Apple grew +70%. It's hard-pressed to say those aren't good results".
He also called India a market with huge potential.
Cook is right. This is an extraordinary company showing dazzling high numbers and will continue. The donkeys of Wall Street can't see past short term declines in their supposed high expectations. They're simply playing the market, shorting for their own financial gain rather than a true reflection of company value and activity.
So be it. But don't let that be statement on true value long term. 10 Billion in profits. In a Quarter. No reason to panic.
Google shares dropped 6% yesterday, a fall of $22 billion in value in a day.
Largely because investors were concerned at Google's inability to maintain advertising prices.
In their own reported numbers, one critical measure is their 'cost per click' which fell -9% and this caused concern - notably on mobile devices where advertisers seem to want to pay less than the norm. Largely, this is because of a perception that the mobile screen is half the size of a PC/Desktop so they'll only pay, half.
The sale of Motorola Mobility to Lenovo at a discounted price, also caused worry. They sold is at 3 billion usd having paid over 12 bn.
All that said, the underlying performance of the company is still strong with Q1 revenues up +20% to over 15 billion usd and profits up +3% to over 3 billion usd. Although investors did expect more.
But one big, huge elephant in the room here, is the size of Google's market cap - a widely huge valuation. At circa 400 billion usd, a 6% slides wipes out a lot of value (circa 22 billion). It is the second highest market cap in America.
And frankly bears no resemblance to the level of profitability it's making although it has large cash reserves. There are growing concerns about the high values of tech stocks so even when the core business delivers great results, any shakiness, causes a major investor outflow.
This seems to sum it up.
The Twitter IPO starts on NYSE today.
Trading will take place starting at 26 us Dollars a share which is at the top end. But as predicted, it's being talked up and up to allow early investors turn a profit. One spread betting company IG, today in The Guardian, are predicting a +70% rise to 43 usd......
In the words of Mandy Rice Davies, well they would, wouldn't they.
Everybody is bullish so a gain is the most likely outcome here today.
It will be the 3rd largest IPO this year but the average one day rise (or 'pop') this year is +17%.
So there's a play on the day but after that....remember Facebook.
There's a lot of bulls out there looking for a quick gain.
UPDATE NOVEMBER 7th - Early trading, shares to go to high of 50 Dollars, drop back to circa 45 Dollars. Huge gains on the day circa +75%. IG were right)
Apple is on the bounce again. An extraordinary capital gain (market cap) of 100 billion usd in a month and a half. Shares are just over 500 usd.
An average of 49 Wall Street shops, estimate it should be 525 usd.
In June, their shares were at 2011 levels so this is some ride. And not a good one because that shows both volatility and uncertainty.
They did report good numbers for Q3 (although net profit still declines) and they had a Twitter bounce from an investor, Carl Icahn, showing confidence through seeking accelerated share buy-back programs. Of course Icahn's two tweets also increased his own Apple wealth.
However, if Apple does so and uses its cash pile to buy back stock, the share price will likely extend further - with some suggesting 700 usd, its all-time high.
But with, wait for it, Apple have 145 billion usd in cash and a real strong market brand so Apple is still great and it's still innovating although not to the same extent.
The new Iphone launch in September should further boost matters and the expected launch of a cheaper, limited IPhone will help too. Apple TV could dominate that market too.
IPhone releases have historically pushed up share values - but be careful - everyone knows that. However, things are good at Apple and just got a whole lot better in the last month and a half, with good expectations ahead. But the volatility is a worry....you can gain a 100 billion in a month but the converse applies.
With their levels of cash though, it's a long, long way to fall.
