April 24, 2007

All is Not Quiet With Apple Before Earnings

As an Apple (NASDAQ: AAPL) shareholder, these are the times that try men's souls. While remaining very positive on the company's long term goals and product trajectory, the latest spat of news coming out of nearby Cupertino has me thinking as to whether tomorrow would be an excellent time to get out of my Apple stock position, at least for the short term.

Apple announces quarterly earnings an hour after the NASDAQ market's close, and of late, the company's stock has been steadily climbing upward. Despite today's pullback of less than a quarter of one percent, the stock is above $93 a share, up 4% from last week, and more than 12% over the last three months. For me, I'm up just under 10% in this most recent short-term buy.

But in the midst of this, in the last few weeks, Apple has confirmed their next generation operating system, Mac OS X 10.5 (Leopard) will be delayed until the fall, rumors have arisen that the much-awaited iPhone is suffering from stability and battery issues, and the SEC's inquiries into stock manipulation and backdating continue. Today's well-documented news reported former CFO Fred Anderson's settling by paying fines of more than $3 million, and issuing a press release that CEO Steve Jobs instructed him to institute the irregularities in the first place. (See: GMSV)

Whether true or not, any suggestion that Jobs could be at risk sets shudders down the spine of any good Apple investor or Macintosh fan. As the company's business and marketing leader, Jobs represents the soul of the company, and is given the lion's share of the credit for all good things that have come to pass at Apple in the last decade. On the news of Anderson's finger-pointing, some in the media admitted to having cold feet, and selling all their Apple stock.

I've bitten the poisoned Apple a few times myself over the years, holding when I should have sold, yet also selling just before a rally. Even if the company reports stellar earnings, with all these questions, will the Street be satisfied? I'm not so sure. Come this time tomorrow, I just might not own any Apple stock. And truth be told, I might not be happy with my decision either way.


  1. I'm totally with ya on this Louis. I pulled out when Apple hit $95 about a month or so ago.

    Been pretty happy with the decision thus far...

  2. Of course I bet wrong. I sold this morning in the 93-94 range. They thumped estimates, and are trading at $101+ after hours. I knew I'd be unhappy either way!