This sounds more like retaliation against Elon Musk for bragging that he has hired away Apple employees than anything else.
Doing something like that a year ago when Apple had a PE under 12 might have made sense. Doing it now, though, seems rather foolish. As anyone who owned Apple in 2012 can tell you, the stock can fall out of favor with Wall Street in a hurry.
Clearly you are one of those fools who clicks on Yahoo's Key Statistics link and thinks Apple has more debt that cash. Apple has 178B in cash and securities, not the $25B that page shows.
There could be several possibilities. First off, Foxconn has been working to replace workers with robots. Also, Foxconn has many other clients besides Apple. Next, Apple could be shifting more work to Pegatron and other companies. Pegatron was reported to control half of the iPhone 6 orders.
Perhaps most likely off all, though, is that the report was complete BS. The timing of the story, the day Apple was to announce earnings, was very suspect. It is not unusual to see false claims made with an intent to drag down Apple's share price. Foxconn even issued a statement today saying the report was not true.
Not when you consider that Apple also has a massive pile of cash in addition to record earnings. It wasn't that long ago that Google actually had a larger enterprise value than Apple.
Last year Apple sold 51M phones and beat estimates handily. However, the idiotic analysts declared that the company should have sold 55M phones so the stock dropped 10%.
It is crazy that some made up numbers the analysts pull from their #$%$ somehow have more importance than the fact that Apple is about to post the biggest quarterly earnings in US corporate history.
I agree. It is just strange that there will likely be a huge change in stock price because of a few wild guesses made by a bunch of idiots.
If you were to take the high end of Apple's guidance and assume the number of outstanding shares remains the same from last quarter, Apple would have $2.66 in earnings. Analysts predict about $2B more in revenue, higher gross margins yet $2.65 in earnings. They don't seem to even bother to think through their numbers.
Gazprom made $16.24B in Q1 2011. Royal Dutch Shell made $15.68B in Q2 2008. Those are the two highest quarterly earnings of all-time. For American companies, ExxonMobile made $14.8B in Q3 2008 and Apple's Q1 last year was $13.1B.
If Apple is even close to estimates then it should crush ExxonMobile's best quarter. While best quarter of all time seems out of reach, a 20% increase would put Apple just above Royal Dutch Shell.
Last year Apple sold 51M iPhones with an ASP of $637 and had revenue of $57.6B. If Apple sold 10M more phones this year and the ASP goes up to $680 as people opt for the 6+ and/or additional memory, that alone would add around $9B to earnings. Combined with the already announced increase in revenue from iTunes, Apple would have a comfortable beat with only a 10M increase in phone sales and everything else remaining the same.
The analysts estimates for phones sold don't seem to be in line with their revenue forecasts. A similar thing happened last year as well. Analysts were predicting around 55M in iPhone sales. Despite a revenue and earnings beat, the stock dropped 10% due to the absurd iPhone predictions.
I am not sure if the iPhone estimates are high or the revenue estimates are low.
I think 100 is far more likely. Friday is the biggest OPEX of the year as these are the LEAPS. Many were sold pre-split back when the company was trading under $500. Expect this week to be a wild ride. Late Friday, though, will be a great time to buy some shares.
The LEAPS expire on Friday and many of those were sold pre-split back when Apple was around $500. So for this week, it is all about the options. The $100 options are far scarier than the $110s.