You can be the richest company in the world with the most iconic brand reputation of the smart phone and app era. Still, if you deceive shareholders the markets could come down on you hard.
That’s exactly what we are seeing with Apple this week, as investors were disappointed with Apple’s guidance and phone sales as well as its decision to omit iPhone unit sales figures in future financial reports.
Lately reports of the demise of iPhone sales were extremely exaggerated and perhaps it has caused Apple to sing a different tune.
However Apple is like stock market royalty after it briefly had eclipsed the $1 Trillion market cap. However if iPhones sales are not expected to decline, why the sudden change in how they do reporting of their sales?
Apple’s stock is down 9.5% since Q3 report, where revenues were healthy but guidance was murky. With FANG so volatile, it’s not unexpected to see Apple on Friday November 3rd post its fifth consecutive week of stock-price losses for the first time since 2012 while finishing the prior session down 6.6 percent.
However, its omission of specific unit sales is really a sign that the Apple of old might be fading. The latest downgrade is from Rosenblatt Securities. Bank of American Merrill Lynch also downgraded Apple on Friday. You have to downgrade companies that aren’t transparent with their shareholders. Hopefully Warren Buffet was informed.
It’s hard not seeing November, 2018 as the worst month for Apple’s stock in quite some time.
The cardinal rule of public companies is to be good to your shareholders, this omission in future guidance will cloud Apple’s prospects at a time when it’s long-term future is already uncertain.
Soft guidance is one thing, but hiding your future weakness is quite another. I guess Tim Cook wants to minimize his future losses.