[Loose Cannons] Black Friday

Well, there's no doubt about it. Apple took a shot the likes of which it has never seen before.

The numbers don't lie: stock price down 50+%, one third of its total available shares traded (132+ million vs Apple's daily average of 4.5 million), earnings to be down 33% in the quarter, etc., etc.

While Friday was certainly more than the "speedbump" Steve Jobs claims it was, is it the end of Apple as we know it?

According to the pundits, it certainly is. Look at these headlines from MacSurfer:
Apple gets bitten" News.com
"Is the Turnaround Over at Apple Computer?" Reuters
"Computer maker struggles to appeal to users beyond its loyal customers" CNNfn
"Analysts rush to issue sour reports on Apple" CNET News
"Apple May Lose Its Shine" Forbes
"Apple's financial cube is cracked" Inter@ctive Investor
Is Apple's fairy tale over?" Inter@ctive Investor
"Disaster at Cupertino: Are the glory days over?" ThemeStream

All of this and more because Apple announced they weren't going to make as much money as they originally thought! Apple is going to report another quarter of profit, its 12th in a row, and yet the stock tanked.

That's mindless, unadulterated, bovine-like PANIC! Look at the number of shares traded. Those numbers don't point to individual day traders. A lot of those shares were institutional investors, dumping Apple from their books before the quarter was over.

Yes, Apple isn't going to make as much money as they thought. Yes, Apple isn't selling as many Cubes and iMacs as they thought they would. Yes, education sales are dissapointing. But is that the reasoning behind some of the comments we've seen over the past few days?

In a wonderful example of not paying attention to what you're saying, Forbes says, "Apple has reported a profit in its last 11 quarters, after losing billions under Jobs' predecessor, Gil Amelio. And with each successful quarter, Jobs' legend has grown."

Well, that being the case, shouldn't Job's "legend" grow even more? Not according to Forbes.

Larry Dignan at ZDNet's Interactive Investor proves he's not paying attention either when he quotes Sanford Bernstein analyst Vadim Zlotnikov. Zlotnikov says, "If Apple's going to continue growing, it's going to have to go beyond that installed base and attract new customers."

Guys, remember when Apple reported the latest sales figures on the iMac? Remember Jobs saying that 47% of iMac purchases were to new computer users and Windows converts? If that's not going beyond the installed base, Mr Zlotnikov is welcome to explain what is.

But the Over The Top Award goes to another ZDNet's Interactive Investor columnist, Sergio G. Non. Sergio begins his column with, "It's easy to despise the arrogance of Steve Jobs & the pretensions of his MacFanatics."

Oh, goody. Here comes another balanced view of the Apple Universe.

In a statement of Dvorakian weight, he says, "Some folks believe it's too early to predict gloom and doom, but that's not true. The turnaround is over..."

OK, remember this guy's name - Sergio G. Non. Here's his email address - Sergio_Non@zdnet.com. After 12 straight profitable quarters, this guy figures the turnaround is over. We'll be sure to send him an email in a year when Apple posts its 16th profitable quarter and remind him of his prognostication abilitites and we hope you will, too.

But the absolute worst of a very bad bunch is David Kleinbard at CNNfN. CNNfN may be "The Financial Network," but they've got a long way to go when it comes to getting their facts straight.

First off, they haven't even noticed that Apple changed its logo a year ago. These financial wizards are still using the old rainbow one.

But it gets worse. David opines, "to keep growing, the company needs to sell products and services beyond its current installed base, converting computer users from the "church" of IBM."

"The Church of IBM"? When is the last time this guy opened a computer magazine? IBM hasn't ruled the PC landscape in years!

He then goes on to say, "As recently as December 1997, Apple was at the brink of ruin. The company had an operating loss of more than $1 billion that year, and its stock was below $7 by December."

Apple's stock price hasn't been below $12/share in 7 years, if ever. Where does this guy get his numbers from? A Magic 8 Ball?

Poor David goes and makes things even uglier for himself. "Jobs brought Apple back from near death with the trendy-looking, colorful iMac and PowerBook lines."

Well, if you can call "black" a color, yeah, PowerBooks are colorful. This guy can't tell the difference between a Powerbook and an iBook!

And, in a minor point of the English language "trendy-looking" implies the iMac was following someone else's fad or fashion. We all know the iMac started the trend, it didn't follow it.

"Aside from the G4 [Cube], Apple hasn't introduced new products recently that give its customers a compelling reason to upgrade, analysts said."

Did those so called "analysts" not notice the dual Processor G4's?

But then "There are many analysts who believe that Microsoft has chosen to keep Apple alive to avoid having further scrutiny from the Justice Department". Is that not the most idiotic statement you've ever read? Name us one, just one, anaylyst who would be dumb enough to say that in public and be quoted on it.

"Microsoft's willingness to continue producing its Office suite for the Apple platform is considered key to Apple's survival."

Microsoft produces Office for the Mac for one reason and one reason only. Because it makes them money. Microsoft does very few things that don't make money for the company. Does anyone believe that Microsoft spends millions of dollars on developing software for the Macintosh simply to "help" Apple to survive?

Not everyone panicked and pulled a Chicken Little. Vernon Silver at Bloomberg managed to do some real reporting and actually talk about real investors, in particular, Prince Alwaleed Bin Talal.

Granted, Vernon doesn't start out well in saying His Highness "lost hundreds of millions this week in shares of struggling Apple..." No, he didn't. Like everone else who didn't sell, he didn't lose a dime and he won't even if he sells.

Vernon makes the point that "As a long-term investor in Apple, he's outperformed most benchmarks, even including today's drop. Since buying the shares in March 1997, he's made an annualized return of about 40 percent as the stock has more than tripled."

Look, everyone calm down. First thing in the morning, go ahead and buy some Apple stock. You'll feel better about yourself. We'll bet you our Macworld Expo San Francisco Press Passes that Apple's stock goes higher than Tuesday's close before Expo starts next January 9th, 2001.

Until next time, Loose Cannons Out!

cannons@applelinks.com

October 07, 2008