Apple’s Stock Will Plummet in its Worst Corporate Decision In Years
Apple knows iPhones sales have peaked, but on Future Guidance they said they will no longer report iPhones sales numbers transparently to shareholders. This is one of the cardinal sins for a public company. If you try to hide the truth, you’ll pay a high price. Apple’s stock will plummet and it will continue to do so. This is, after all, a grand betrayal of stockholder and investor rights.
On November 1st, 2018 Apple’s stock was $222.02, after it announced its Q3 and this bizarre decision. It’s been falling ever since and is already down to $207.48. For Warren Buffet that amounts to $4 Billion of Apple stock.
Apple’s announcement about a change in its earnings reports means even the tip of the peak of NASDAQ is now one of those volatile stocks like FAANG. Apple’s stock usually doesn’t follow the trends of tech stocks since it has such damn high profit margins and revenues.
So what’s the problem in this? It means that along with trade war fears, it could hurt stocks in what is traditionally a good month, November. With the likes of Amazon and others forecasting a lack luster holiday season (even with consumer sentiment supposedly high) it makes for uncertainty, and markets don’t generally like that.
- Apple said Thursday that it will no longer disclose unit sales individually for iPhone, iPad and Mac.
- It’s a grave risk that will likely mean Apple won’t be worth $1 Trillion dollars market cap anymore. Microsoft and later Amazon are quite likely to overtake it.
- Apple basically posted its fifth consecutive week of losses for the first time since 2012 on Friday, November 2nd, 2018.
Apple isn’t what it used to be. It keeps increasing iPhone prices. It’s also betting on China, and China isn’t exactly the best place to bet on, where smart phone saturation has taken place globally.
If Apple’s iPhone business is more profitable than ever, Apple’s next big product is as uncertain as ever.
Apple’s Q3 revenue was $62.9 billion, an absurd amount for anybody else, but again the lack of confidence for Q4. FANG has been more volatile in October 2018 than any time in recent memory.
- Phone unit sales of 46.89 million
- Apple has failed to find a new star product after the invention of the iPhone
- Apple has managed to increase revenues at a mere 7.9% annual rate, according to Morningstar.
Apple’s stock should continue a steep decline next week. In its earnings call, Apple said that starting next quarter, it will stop breaking out individual sales numbers for the iPhone, iPad and Mac — instead wrapping them into one reported revenue figure. This is not something you do without a good reason and investors will punish it harshly for breaking such a cardinal rule.
Trying to obscure the truth and not be transparent is not something you can do in 2018 that can be good for your company. Plus it’s an epic failure of corporate responsibility to shareholders. It’s yet another remarkable failure of ethics by tech leaders in 2018 and a decision Apple may come to regret.