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Apple stock down 10% after hours

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Re: Apple stock down 10% after hours

#11

Post by ScottBurson »

X-Istence wrote: post #7
scarmig wrote: post #4

Earlier quoted context omitted.

Interesting chance for a HN gut check: If you were offered $100k of Apple or $100k of Amazon right now, which would you choose? You would have to receive and hold for 10 years. To me, the answer to that is obvious (AMZN), but I'm curious if my intuition matches up with the general opinion. I'm not sure which would be a better sign. ETA: Original intent was to talk about 100k in dollars, not in shares.

I would pick Apple. I have a feeling that in 10 years they will have re-invented themselves and be making huge profits, and paying dividends on those shares. For example, 100k of Apple shares today will net me 265,000 USD. Assume that I decide to just pocket that money ... I could live off that for a full year, easy. They pay that every quarter (or at least that's the case at the moment). I'll make money now, be able…

I think the parent's intent was $100k worth of each, not 100k shares.

Re: Apple stock down 10% after hours

#12

Post by seiji »

Just to recap: this afternoon two Apple-Fact stories ("Apple releases earnings") get flagged the hell off the front page.

At the same time, two anti-Apple posts float right to the top.

People sure do resent success.

Re: Apple stock down 10% after hours

#13

Post by yannickt »

scarmig wrote: post #4
adambratt wrote: post #2

Biggest reason for this is that Wall Street has noticed the huge cash pile that Apple is just sitting on. A good chunk of their market cap is made up of this cash pile that they are reinvesting through their hedge fund. There's a reason why Amazon keeps going up even though they are barely profitable. Amazon keeps reinvesting their profits into the company's R&D rather than throwing it in the bank.

Interesting chance for a HN gut check: If you were offered $100k of Apple or $100k of Amazon right now, which would you choose? You would have to receive and hold for 10 years. To me, the answer to that is obvious (AMZN), but I'm curious if my intuition matches up with the general opinion. I'm not sure which would be a better sign. ETA: Original intent was to talk about 100k in dollars, not in shares.

I would probably go with AAPL. AMZN is currently trading at over 3,000 times earnings; their forward P/E is in the 150 range. They are mainly an online retailer, and retail and high profit margins usually don't go hand in hand. I expect them to grow, but it's hard for me to imagine a plausible scenario in which their growth matches their current valuation.

Also, Apple pays dividends, and they have enough cash to operate for 1-5 years on zero sales. They are better positioned (IMO) to reinvent themselves without being rushed, and at the same time minimize the potential negative impact of that reinvention to their shareholders.

Re: Apple stock down 10% after hours

#14

Post by doe88 »

An interesting quote of Tim Cook today:

"We aren't interested in revenue for revenue's sake, we could put the Apple brand on a lot of things and sell a lot more stuff. The most important thing to us is that our customers love our products, not just buy them but love them."

I hope that their current market capitalization won't make them modify their pace and be disturbed by this noise. I hope they won't rush out new products just for the sake of making Wall Street happy. Keep iterating, keep hard working on non-public stuffs, there is no hurry.

Re: Apple stock down 10% after hours

#15

Post by ruswick »

Cookingboy wrote: post #8
ScottBurson wrote: post #5

Earlier quoted context omitted.

That might be a reason for a long-term decline, but it's not a reason for it to drop 10% in a few hours. Something is going on (I have no idea what). EDITED to add: ah, I see they released earnings.

People emotionally overreacting to the slight revenue miss (by slight I mean missed over-hyped analyst expectation by 1%). It's bizarre to see that fundamentals are completely disregarded when it comes to trading the company with the highest market cap in the world.

The stock market is not a place for rational actors. It is a place for visceral, very exaggerated responses to trivial developments.

Re: Apple stock down 10% after hours

#16

Post by doctorpangloss »

It's crazy they they sell a very conventional, understandable thing, a globally recognizable product of unlimited magic, that nearly every person of means in the world has or wants—and yet the market hammers them hard on a 0.7% miss on expected revenue in a quarter with 8% fewer days than 2012Q1.

Here's what I think they should do: Tim Cook needs to become a narcissistic billionaire who parrots about polyamory and militant libertarianism. Now that's what Silicon Valley is all about. $$$.

Re: Apple stock down 10% after hours

#17

Post by uptown »

fh973 wrote: post #10

Apple is in the category "growth company" and needs a growth story to justify its value. When the roof comes in sight, as it does currently, the party is over.

They've essentially refreshed their entire line of products, leaving a wide open field for 2013.

Makes me wonder what they've got in their pipeline. If it's just spec bumps and incremental improvements to existing products, they may not have what it takes to excite. If they have a product or products that enter into new markets, they could return to the $700 levels we saw before.

What I expect in 2013? What markets are untapped?

1. Apple TV will be opened up to app developers.

2. Apple will release a wearable device (wristband, watch, something).

3. Something with home-automation or smart-home technology.

Re: Apple stock down 10% after hours

#19

Post by Cookingboy »

fh973 wrote: post #10

Apple is in the category "growth company" and needs a growth story to justify its value. When the roof comes in sight, as it does currently, the party is over.

Are they still considered a "growth company" when their stock is trading at 11 P/E? Hell, it's barely considered a growth stock P/E when it was at 700 a share. If it's treated as the same type of growth company as even Google then AAPL would be worth close to $1000/share now.

Re: Apple stock down 10% after hours

#20

Post by ttar »

leoh wrote: post #18

I always had the sense that after-hours trading was volatile, often manipulated, and not indicative of near-term future performance -- are my assumptions incorrect?

Yeah, aftermarket is pretty good indicator of next day opening price.
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