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Apple Inc. Message Board

  • abbaman7 abbaman7 Dec 25, 2007 7:02 PM Flag

    What Worries The Shorts

    Perhaps you too have noticed the intemperate, ill-considered and downright thoughtless comments emanating from those who just can't wait to see AAPL's share price decline. Because the root cause of their difficulty is trying to make money on the wrong side of this stock, it behooves the rest of us to contemplate their present predicament. 20 million out of AAPL's 875 million shares [2.32%] outstanding are held short. Such short interest represents approximately a 15% increase from the prior period [20.14 million vs. 17.56 million]. Given that about 40 million AAPL shares are traded daily, it would take 2 days for such short interests to cover their positions. Institutions presently hold 2/3 of AAPL's stock but that percentage is growing. With all the momentum on this stock flowing in the 'wrong' direction, Shorts need a catalyst from somewhere to avoid losing another 10%-20% of their money in the near term. The problem is that no such catalyst is likely to emerge as all eyes and ears remain focused on hearing from AAPL as to just how well they are doing. The situation for the short interest crowd appears fairly hopeless to me--at least over the next 3 weeks or so. And then, if forthcoming news is unabashedly positive, further down the investor toilet they will go. Without real news to shake the confidence of Longs, they engage in magical thinking, coming up with the stupidest theories as to why holding AAPL stock at this juncture represents a precarious enterprise. I really liked the one the other day from the guy who said that he never saw so many MacBooks being donated to GoodWill.
    Laughable, to be sure, but at least somewhat creative. Less creative are those claiming--contrary to all known reality--that AAPL products are having a tough go during this Christmas season. But I feel no pity for these folks; I am happy to take their money and gladder still that their foolish bets help AAPL's share price rise further as they become compelled to throw in their Short Towel. Perhaps they will learn a useful lesson from this or perhaps not. Either way, they look like roadkill to me.

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    • I've been a stock "Investor" in this great stock for almost two years. Here are some reminders on how the bashers have tried to drag this stock down over the last year:
      1) iPhone patent dispute, claiming it would never be settled w/ Cisco (back in early '07).
      2) Claims before the iPhone launch that the iPhone was technically above Apple's capabilities and that it would be released with a slew of technical problems.
      3) The delay of the Leopard release was due to huge problems with it, and the iPhone, and that Leopard would never compete with MS Vista -- :) !
      4) That iPod sales would be less than analysts expectations for all three quarters this year -- truth is, iPod sales keep escalating.
      5) That the iPhone glass screen had major breakage when dropped on concrete.
      6) Mr. Jobs illegalities with trade options back in Dec'06 and that he was reportedly headed to jail (remember when the stock dipped to < $78 last Dec?).
      7) Rumored reductions in production of the iPhone in late July'07 (remember when the stock dropped from around $145 to < $120?).
      8) MAC sales were dwindling -- the fact is, sales have gone from 3% last year to over 6% current.

      These are but snippets and just some of the malarkey I have heard over the last year. My point is, as an investor, you must overlook their insipid lies and look at the company's great fundamentals and think long term. This stock has a huge cash reserve in its coffers, AAPL continues to sell all of their existing product, always beating expectations, they have great leadership, they continue to have a gush of cool new and hip product in their pipe line (wait until MacWorld next month).

      Go AAPL, go longs!

      • 1 Reply to macsaadiq
      • Most of the bashers on this board are not shorts at all, rather they work for Microsoft.

        You can't have the same group of people in the same stock since like 55 bucks remain on this board without a major ulterior motive........which is in fact these people work for the main competition.......Microsoft.

        Take care.

    • nice post. merry christmas

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