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Mercury-News: Apple tops the Valley for valuation
With the total market value of AAPL at about US$220 billion, over the past year Apple has managed to de-throne Google as Silicon Valley's most valuable company. By comparison, the search and cellphone-centric Big G has a market capitalization of about $174B as of today's prices. In a retrospective piece, the Silicon Valley Mercury News points out that Apple's market cap is up 107 percent from one year ago. There are only two companies in the United States with a market capitalization greater than Apple's: Exxon Mobil and Microsoft. Earlier this month, Apple's market cap passed that of Wal-Mart; the margin was $2.84 billion as of April 2nd, 2010 and is about $18B today. Needham & Co. analyst Charles Wolf notes Apple's success at riding out the USA's economic recession. "It's just mind-boggling. Thanks to the iPhone, it just sailed through the recession. It was just an incredible engine." For the latest on Apple's financial health, follow our live blog of its 2nd quarter analysts call, tomorrow at 2 pm PDT/5 pm EDT. AAPL is down about 1.5% today at 1 pm. [Via Macsimum News]
Piper Jaffray AAPL stock forecast bumped up to $299
According to AppleInsider, Piper Jaffray's Gene Munster expects Apple's stock to hit US$299 by the end of the year. When Apple revealed that it had sold 50 million iPhones at the iPhone OS 4 event, the analyst realized that meant at least 6.9 million iPhones were sold in the March quarter, and that's a conservative estimate. With those numbers in mind, Munster predicts that Apple will sell 7.5 million iPhones in 2010's first quarter. That figure would represent an impressive 93 percent year-over-year growth in iPhone sales. Note that Apple realized a 90 percent increase y/y last quarter. As a result, Munster has bumped his predicted end-of-year price of AAPL up from $287 to $299 per share. Meanwhile, Munster also raised his Q1 Mac sales estimates from 2.6 million to 2.9 million. Take his numbers with your choice of salt grain size, as he did shank the iPad launch estimate pretty badly with a last-minute bump in expected sales. Apple reports quarterly earnings on April 20th, and we'll be covering the analyst conference call as we always do.
On Apple's $40 billion, and the question of dividends
AAPL has been hitting new highs just about every day. Yesterday the stock price hit an intra-day high of $230.20, a lofty height indeed. We pointed out earlier that Apple now has the fourth largest market cap of any publicly traded domestic company, so maybe it's time to revisit the question of Apple declaring dividends on its stock. Apple has not declared a dividend since December of 1995. After the last shareholder meeting, Steve Jobs stated that the money was best left in the bank so there would be no question of loans if something big was to be bought. "The cash in the bank gives us tremendous flexibility," explained Steve. The Motley Fool makes an interesting case in favor of dividends. Apple has no history of massive acquisitions, and keeping $40 billion around for just that reason sounds less than reasonable. A case is also made for keeping the money as preparation for the next big recession. This doesn't seem to hold much water, however, since analysts predict that Apple will grow by 18% per year for the next five years. That should provide more than enough cash, predicting that Apple will report net income of around $21 billion in 2014. Of course, predictions are often wrong, but Apple has been excellent when it comes to beating expected earnings numbers for some time. 77% of informal Motley Fool poll respondents think that Apple should declare dividends. After all, that cash is really owned by the stockholders and it seems that a good number of them would like to get some of it back. Read on for another view.
Carl Icahn now a 13.7% shareholder in Take-Two
Monday 22 March 70-something kilos. My kilo talk has gotten others thinking I'm moving the company to Canada, but I <3 my NYC. Food consumed today: No low-fat blueberry muffins today on the cart. I only like the tops anyway. Heard some pleb in the office talking about Blueberry Muffin Tops as a cereal. Tried some. I'm not opposed. Afternoon. The beautiful weekend has shifted to gloomy overcast to fit my mood. New York. Cherished Diary, What is the iCahn up to? Carl Icahn previously put three of his specially selected associates on the Take-Two board (including iCahn-mini, Brett Icahn) after he obtained 11.3 percent in company stock. Now he's bought another 710,840 shares, which I estimate to cost about $7.1 million, giving him 13.7 percent of Take-Two stock. The confusing part, Diary, is why? He has over 10 percent already and three iPods on the board, the incremental increase in stock isn't anything big -- it's just, weird, you know? Of course, you know! Diary, that's why I can always trust you! I just wish I knew if he was gearing up to push for a buyout or trying to show more faith in the company now that he has boys on the board. I wish I knew. I really, really wish I knew. xoxo, Strudel [Via IndustryGamers]
Palm shares take 25 percent plunge after downer earnings announcement
Remember that wild January day a bit over a year ago, when Palm debuted webOS and shares went wild? Well, after months of setbacks in the sales arena, and a rough $22 million Q3 loss announced yesterday, Palm's stocks took over a 25 percent dive today, dipping below $5 for the first time since the Pre was announced. At the time of this writing things seem to be leveling off a bit, but it's the most damage the shares have seen since October of 2009. Morgan Joseph analyst Ilya Grozovsky has downgraded the stock to "sell" and set a target price at $0. Canaccord Adams analyst Peter Misek has set a similar target, saying that he sees a "complete lack of earnings visibility." So, candlelit vigil time? Imminent buyout? Riots in the streets? Hardly. Palm's own Jon Rubinstein said in the earnings announcement that the company is "looking forward to upcoming launches with new carrier partners" which should (hopefully) brighten spirits a bit, and we haven't heard a single credible buyout rumor, despite plenty of wild conjecture. There are also still a pair of analyst hold outs (just two, to be exact) that have buy ratings on the stock, reports Thomson Reuters. As for rioting? Well, that's up to you. No matter what, Palm has some serious soul searching to do.
Rumor: GameStop being eyed for purchase by private equity group
GameStop might be worth roughly $3.27 billion, but if reports are correct, a group of folks at a private equity firm may be considering an offer of $4.94 billion (a 33 percent raise over the current, rumor-inflated stock prices) to acquire the publicly held game retailer. The Street is reporting that the rumors of a buyout have already raised stock prices by nearly six percent to $19.86 per share since just five days ago, as of this afternoon. And those rumors could be seen as partially substantiated by the company's lackluster performance on Wall Street as a publicly held company. Sterne, Agee & Leech analyst Arvind Bhatia told The Street, "The company generates strong free cash flow and is not getting respect as a public company." A buyout of GameStop by a private equity firm could mean moving the company's public status to private, not to mention a possible management shakeup (among other things). We asked GameStop corporate for comment and were told, "We do not comment on speculation or rumor," so for now we'll just have to wait and see what shakes out.
AT&T's LG eXpo pico projects itself right out of stock, production problems to blame?
As Windows Mobile 6.5-based handsets go, LG's eXpo unquestionably stands near the top of the pile thanks to its WVGA display, 1GHz Snapdragon core, and optional pico projector hump for the rear -- but there's a problem: it's really, really hard to find. Nigh impossible, actually, especially now that AT&T has pulled it off its online store altogether (it had been showing out of stock for weeks anyway). The reason for that isn't entirely clear -- LG and AT&T are happy to cite "strong demand," naturally, but the company that supplies the eXpo's fingerprint sensor says there are actually some outstanding antenna problems that have the production line backlogged. So when's it coming back? "Soon," according to LG, but in this business we've seen "soon" mean anything from a few minutes to a few years, so that doesn't mean much -- and in the meantime, we're thinking T-Mobile's HD2 stands to eat its lunch. [Thanks, Luda]
Apple shares hit record high on iPad shipping announcement
Note to Microsoft, HP, Dell, and whoever else wants to get in the next-gen tablet game: your concepts are nice -- even spectacular, in the case of Courier -- but Apple's about to actually ship a product, and investors are taking note. AAPL shares hit a record high of $219.36 this afternoon after the news that iPad pre-orders would begin on March 12 with an April 3rd delivery day, and they closed at $218.95, which is up around four percent. That's got us curious: given the choice between actually purchasing the iPad and twiddling your thumbs waiting for unannounced, unpriced, and even possibly un-real devices like the Dell Mini 5, the HP Slate, or the Courier, are you taking the sure thing or holding out for your vaporous dream device? Hit us up in comments -- and be nice to each other, it's the weekend.
AAPL hits intra-day all time high, headline writers scrounge thesauri for 'stratospheric' synonyms
Apple's announcement earlier today of an on-sale date and presales for the iPad seems to have struck a major chord with investors. Never mind the fact that April 3 only equals "late March" for unusually large values of March; when it comes to magical & revolutionary, Wall Street votes "yes, please" with a record intraday high for AAPL. The stock hit $219.70 at 1:14pm this afternoon, and is on track to remain above yesterday's close of $210.71. Apple investors who bought in 5 years ago, when the stock traded around $40 -- or even those who sought a bargain in January 2009, and picked up some shares in the mid-$80s -- are undoubtedly delighted. Just in today's trading, Apple's market capitalization is up over $7.5 billion dollars, at around $198B total; compare to Google's 138B$180B, HP's $123B, and IBM's $165B. Not too shabby. Update: Closed at $219. Jim Cramer's "Stop Trading! " segment included his philosophy of trading AAPL, which suggests a buy and hold now, dump right before April 3, then buy back in during the inevitable backlash against the iPad when the press says it's not deserving of the hype, "because they will be wrong." [h/t Silicon Alley Insider] Note: I hold a small, long-term position in AAPL.
No Apple stock split...for now.
Thursday, Briefings.com, CNBC and a passel of other market analysts predicted that a 4 for 1 stock split would be announced at the Apple Shareholder Meeting. This rumor moved the market, but there are conflicting opinions to why. First, for the uninitiated, a stock split is a zero sum game. One interpretation is that a firm considers its stock too highly priced for the average consumer and decides to split. For example, let's say that Apple is trading for $200 and you have one share. If a 4 for 1 stock split takes place, you will wind up 4 shares, instead of 1, but each share will be valued at $50. Did you gain or lose any money? No. It's all on paper. However, to those not familiar with the Buttonwood tree, and that's a lot of us, it sounds like 'quick buy Apple and you'll be getting 4 times as much'. The case for this sort of stupidity is well made by Barrons. Stock splits are nothing new to AAPL. They've split 2 for 1 three time in the past, in June 1987, June 2000 and February 2005. There are two general schools of thought on the reason behind stock splits, and they are total opposites. The first theory is that a company will split a stock if it is in trouble to allow lower dollar investors to buy their shares at half the price and thus incur less risk. The other school of thought is that a good company realizes their stock is just too expensive for the small trader who has some cash on the sidelines. It is meant to give the small guy an easier way to buy some stock without needing to commit the $200 for a share. Both sides have their points and, to an extent, both points are based on smoke and mirrors since they do not effect the worth of the company or the aggregate value of the stock by one penny.
Palm sales 'lower than expected,' revenues to miss targets
Ruh-roh. Palm just confirmed what we heard from analysts yesterday: sales aren't going so well. The company's updated its third quarter financial guidance to say that consumer adoption of its products is "taking longer than expected," leading to lowered order volumes from carriers and deferral of some orders to "future periods." That certainly puts that "Chinese New Year" Pre / Pixi work stoppage in a slightly different context, doesn't it? Looking at the new numbers, Palm says it expects non-GAAP Q3 revenue to be about $300m, or about the same it pulled in Q2 before the Pre Plus and Pixi Plus launched on Verizon. That's not a good sign, but we'll see if that kicks someone at Verizon or Palm into realizing they might need a new, less-stupid ad campaign focused on capabilities, not stereotypes.
Sony returns to profitability as core electronics business struggles
Finally, after closing 18% of its manufacturing facilities and cutting 20,000 heads across its global organization, Sony just posted a profit for the quarter. We're talking an operating profit of ¥146 billion ($1.5 billion) for the quarter on ¥2.2 trillion in sales. Sony's net profitability came in at ¥79.2 billion after three straight quarters of losses, handily beating The Street's mean estimate of ¥33.73 billion sending stock up some 4% at the time of this post. Unfortunately for us gadget nerds, Sony's return to prosperity is largely due to a doubling of sales at Sony's financial unit and a 16% rise in its movie business -- sales from its consumer products and devices division were off 11% thanks to flat-panel TV price competition and component costs. VAIO PC sales were up a slight 2% worldwide while sales of its venerable PS2 (2.1 million units vs. 2.5 million a year earlier) and PSP (4.2 million vs 5.1 million a year earlier) were both off for the quarter. At least the price cuts on the PS3 helped push sales up to 6.5 million from 4.5 million. Still, profit is profit and profit must grow regardless of crummy consumer sales, you know.
Tecmo Koei lowers profit forecast after Q3 losses
Tecmo Koei has announced that it's lowering its annual operating profit forecast (essentially its guess for how much profit it will bring in before taxes) by a painful 95%. In addition, stock fell 9.5% to 630 yen ($7). This comes after the announcement of disappointing third-quarter losses (PDF link) totaling 1.842 billion yen ($20.4 million), and after the announcement that two high-profile games, Quantum Theory and Trinity: Zill O'll Zero, have been delayed, thus eliminating whatever they would have contributed to the current fiscal year. Now it's all up to Dead or Alive: Paradise and the Western releases of Monster Rancher DS and Again. Source [PDF]
All of the news from today's iPad announcement
What a day it's been. The tablet is finally out. That's right, the tablet we've been waiting years for is real and will be on sale soon, only it's called the iPad, and it's pretty similar to the iPhone. Just in case you missed something today, here's everything we've learned about the magical and revolutionary device, all lined up in one easy-to-browse list. Just think, in 60 days, you'll be able to flip through these posts with your finger. On a 9.7" IPS screen, I mean. Liveblog and major news Apple Event Metaliveblog Apple announces the iPad AAPL goes on a rollercoaster ride See tweets live during the event on @tuawlive iPad pricing starts at $499, available in 60/90 days Hardware Apple's official iPad video, specs page Apple making its own chips, starting with the A4 iPad will ship with 802.11n Wi-Fi, 3G optional Apple announces keyboard dock for iPad Five iPad accessories available at launch What's missing from the iPad Software All iPhone apps will run on the iPad Apple announces iBooks, an e-reader for iPad Apple shows off new versions of iWork apps for iPad iPhone OS 3.2 SDK released, supports iPad but covered by NDA
AAPL goes on a roller-coaster ride
The above image from SingularityDsgn graphically shows the wild roller-coaster ride that Apple's stock has been on today. It traded at roughly 1.5% below Tuesday's closing price heading into today's iPad announcement, but started climbing during the iBooks announcement. AAPL's stock took a major leap when pricing information was released, and is currently trading around 209.69, up about 1.75% (please note that these numbers fluctuate frequently). Lots of jumping is about right for any Apple event, though the big jump when price was announced is somewhat surprising. AAPL actually tends to drop after an event, as there are so many rumors flying around ahead of time that investors are easily underwhelmed. But it looks like especially the pricing news won their approval today. As always, this is not official stock information, and you shouldn't make any buy or sell decisions based on what you read here.
'EA is in the wrong business,' ex-exec Lasky blogs
Former Electronic Arts executive Mitch Lasky, who is now a member of venture firm Benchmark Capital, is not holding back his thoughts on the current financial turbulence at EA. Once EA's executive VP of mobile and online, Lasky now writes on his personal blog, "EA is in the wrong business, with the wrong cost structure and the wrong team, but somehow they seem to think that it is going to be a smooth, two-year transition from packaged goods to digital." Strictly from a business perspective, Lasky lays out what he sees has gone wrong at EA, noting that in February of 2007 he made the argument to the former EA CEO that the company needed to cut $200 million annually by "reducing headcount and cutting back on ridiculous expenditures on risky titles" like Spore, Godfather and The Simpsons. He also advocated for "hyper-aggressive [research and development] investment and acquisitions in a transition to digital distribution and games-as-service." EA is starting to make such a transition, as seen in the publisher's strong iPhone and mobile sales, along with its dabbling in Facebook games. On the other hand, EA's MMO track record has been a legacy of failure that includes Earth & Beyond, The Sims Online and (sorry) Warhammer Online -- but perhaps Star Wars: The Old Republic will change that. Given that EA's current value is so low (by billionaire's standards), Lasky finds it incredible that nobody has stepped in and scooped up the company for a bargain, noting that "Disney has been looking at them since I was at the house of the mouse back in the early 90's. And there are Chinese companies, like TenCent, that could easily swallow EA whole." [Via Big Download]
MarketWatch: Keep your eye on Apple in 2010
In an article on MarketWatch, Frank Cioffi explains why he believes Apple will deserve the investor's attention in 2010. First off is continued strong iPod sales, and we've got to agree. After sustaining a rate at or above 10 million units sold per quarter, you've got to wonder, "Doesn't everyone have one already?" But seriously, the annual updates are compelling enough to prompt people to upgrade (iPod touch, nano with video) or cheap enough to warrant a second unit (iPod shuffle). Apple knows how to sell iPods and the trend should continue in the new year. Also notable is Apple's seemingly renewed commitment to the Apple TV. Once described as a "hobby," Apple released version 3.0 of its software late last year. Also, there are rumors about that Apple is pursuing a subscription model with the major television networks. Expect to hear more from the Apple TV team in 2010. Additionally, Cioffi focused on Steve Jobs himself. "...Jobs' determination is as extraordinary as his ability to create compelling products." After missing half of the year to recover from a liver transplant, Steve returned to work in June as promised and, from an outsider's perspective at least, is back to business as usual. As Cioffi pointed out, what happened in Steve's absence is even more important for Apple's future: The stock continued to climb despite rumors of his rapidly-declining health and Apple demonstrated a strong bullpen of talent beyond Jobs. Cioffi goes on to list strong Mac sales, the App Store's performance and the ever-present tablet rumors as additional points of note, so go and read the rest of the article. Here's to a prosperous 2010! [Via AppleInsider]
Apple's 'iSlate' and other rumors that have given its stock a holiday boost
The Apple tablet rumors are at a fever pitch, yet again. Depending on what you've read, it's all but confirmed that the company's got a January 26th event scheduled at Yerba Buena Center for the Arts (YBCA) in San Francisco, CA. All this, of course, with nary a word or comment from Cupertino HQ, and without the context that this trend has come and gone ad nauseam, both with the tablet and before with the years of lead-up to the iPhone. Here's the latest bit: MacRumors has dug up information about a Delaware-based company, Slate Computing, LLC, that was founded in November 2006 and owns the trademark "iSlate," the signatory of said trademark being Apple's Senior Trademark Specialist Regina Porter. Given that Apple owns "iSlate" trademark in Europe and that it's allegedly pulled similar stunts with a "fake" company and the iPhone trademark, sure, we could buy into this being just a dummy corporation... but does it really confirm an impending tablet that'll be called the "iSlate?" Not at all. We wouldn't be surprised if Apple has done this for numerous other trademarks, either to give itself more options or to prevent others from trying to manufacture products under those names. (Slate Computing, LLC also happens to own the "Magic Slate" trademark, just so you know.) Also bought up in 2006? The domain iSlate.com, which again according to MacRumors (with help form Mark Gurman of AppleRejectedMe.com) was apparently and briefly shown to be owned by Apple at some point during 2007. Food for thought, but trust us, you don't want to confuse hearsay for concrete fact. Which brings us to December 24th, where we see a statistically significant uptick in Apple's stock value. Seeing as the fiscals were released back in late October along with the last refresh of hardware (Mac Pro specs notwithstanding), it seems everyone decided to spend their holiday bonuses on some Apple shares. Now, we're not claiming to be professionals here by any stretch of the imagination, but it seems a lot of the activity here can be attributed to the recent flux of rumors. Jason Schwarz of The Street has an interesting take on it, which if you've got 15 minutes to kill should be worth your time to browse through.
Let's talk AAPL and the future
It's been a roller coaster ride over the past two years for Apple (AAPL) stock. In December 2007 it hit a then-peak of $199.83 a share. Just two months later AAPL sunk to $125. Three months after that it had recovered to the $180s, but by November 2008, AAPL had plummeted to $82 a share. Since then, the stock has recovered and hit an all-time closing high of $207 on November 17, 2009. As of today it's sitting pretty in the $190s -- though some think the drop from the $200s to $190s is suspicious. I argue with people all the time why Apple didn't deserve its dips and plummets over the last two years: The company is sitting flush with $23.5 billion $35 billion in the bank, in cash (about the same as the total market value of another major US computer maker, named for its CEO and founder, who 12 years ago famously suggested shutting down Apple and giving the money back to shareholders). It has zero debt. It is one of the most respected companies on the planet and has the world's greatest CEO. But more importantly than the cash and its status, I believe AAPL is a great buy because it has such small market share in all the categories it operates in save one...
Your pal Bobby earns $20 million in stock sale
What does an Activision Blizzard CEO do to celebrate the most successful launch in entertainment history? Sell his stock, of course. Earlier this week, CEO Bobby Kotick sold nearly two million shares, roughly 40 percent, of his investment in Activision Blizzard alongside the launch of Modern Warfare 2. GameSpot notes that the sale earned Kotick approximately $20 million, with a gain of about $10 per share sold.While Kotick's sale couldn't have come at a better time (for someone looking to sell), his massive stock dump could be cause for concern for investors. Consider that there may be a few weaknesses in Activision's current strategy, including relying on sales of music games, a vital part of the publisher's empire, which have been slowing down. Activision's focus on iterative brands may also be vulnerable to sales slumps, as EA discovered when consumers became disinterested in worn-out franchises like Medal of Honor. Certainly, Kotick's stock sale could indicate that Activision has peaked as a publisher.Then again, chances are, it hasn't.Update: A reader informs us that Kotick still has many "unvested holdings," and with these stock options expiring in the spring, Kotick is forced to sell his remaining vested stock "or else he just gives up those millions for free." Essentially, this sale doesn't relate to his valuation of the company's economic position.
