Tim Cook Negligent on Defending Apple's Share Price - Price Bordering on Perverse
pple’s (NASDAQ: AAPL) share price is bordering perverse at this time. It no longer correlates to financials or even legitimate business prospects. The share price fluctuates on a day to day basis as more of a score board based upon the number of positive or negative blogs, rumors or Wall Street analyst downgrades versus upgrades.
Never mind that the opinions of analysts are historically erroneous. Last week an analyst at Jefferies downgraded assigning a price target of $420 while Apple was already in the $430 level. The downgrade scared the price down approximately $9.00 lower on Tuesday. It begs the question of –why- would a firm bother to come out with a downgrade with a price target about half of a percent below the already obliterated share price? They seem to be a little late to the party. What value does such a late downgrade bring to their firm’s clients? It would seem as they are playing the game of piling on.
How did Jefferies determine that a company that has already declined so substantially in the past month does not already reflect possibilities like a possible delay with the new iPhone 5S due to suppliers having trouble with the new casing colors?
After the substantial decline heretofore, how did they arrive at the number $420 being the new value for Apple’s share price? Why not $390 or $418 as arbitrary price targets? On top of that, Jefferies indicated there might be a “25% chance of the delay.” Why 25%? And how long might that delay be, 2 days? 14? And how much will that possible delay ultimately cost Apple?