Daily Archives: August 12, 2007

Apple’s (AAPL) Odd Share Price Drop

A list of the most actively traded stocks last week turns up two companies with shares in fairly sharp declines. Not Bear Stears (BSC) or Goldman Sachs (GS), but Apple (AAPL) and Qualcomm (QCOM).

Qualcomm’s shares were off 7%, but the company lost its appeal of an ITC ruling to allow handset companies to import phones with its chips. It also lost another court battle with arch rival Broadcom (BRCM).

Apple is another story. Most of the talk in recent weeks has been about how well the new iMacs will do taking market share from PCs adding another leg to Apple’s thriving iPod and emerging iPhone businesses.

Apple was down 6% for the week against a 1% rise in the Nasdaq. After hitting an intraday high of $148.50 on July 26, the stock came down to a $120.30 intraday low last Friday. Big drop.

The company has become the victim of its own success, and because of that the shares are back to where they were at the beginning of July when they started an extraordinary 23% run.

Even the slightest bad news about iPhone sales could drop the stock further. IDC or Gartner data on computer sales will have to show Mac market share rising from where it is just above 5%. If not, the stock will take a tumble. The rate at which iPod sales are growing is decelerating. If that happens faster than Wall St. has calculated, it’s a problem.

Steve Jobs’ company has out-performed the broader market handily as the Nasdaq has risen over the last few months, but now it is falling faster and it will not take much to make that more pronounced.

Douglas A. McIntyre

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Posted on: August 12, 2007 – 3:19 pm in Consumer Electronics,

Detroit’s Quality Improvement Myth (TM)(GM)(F)(HMC)

The press  gave extensive coverage to the fact that GM’s (GM) Buick division tied Toyota’s (TM) Lexus group in the latest JD Power 2007 Vehicle Dependability Survey. The next spot on the list went to Cadillac which was followed by Ford’s (F) Mercury division.

Of the fourteen cars that were above the industry average, six were made by nameplates that belong to Ford and GM and six went to Japanese companies. BMW and Mercedes rounded out the list.

But, what about the 23 brands that were below the industry average. Twelve were from the Big Three and only five were from Japanese companies  But, Toyota and Honda (HMC) had no brands on the list. All of the poorly rated cars from companies based there were from second tier companies: Mazda, Mitsubishi, Nissan, Suzuki, and Mitsubishi.

As long as Detroit dominates the bottom of a list of this kind, it does matter how well it does at the top. Products from the Motor City companies still have not made the grade.

Douglas A. McIntyre

Posted on: August 12, 2007 – 2:06 pm in Uncategorized

Apple (AAPL) Gets Into Social Networking

Apple (AAPL) has created several "widgets" which will make it easy for iTunes users to show what they have bought, what they listen to, and what they think of their music. TechCrunch writes that MyiTunes is available from Apple now.

The new Apple software certainly has the potential to increase sales for iTunes as listens share preferences and play-lists. It is surprising the company did not make the move sooner.

But, it is another reason that competing with iTunes has become almost impossible.

Douglas A. McIntyre

Posted on: August 12, 2007 – 9:27 am in Entertainment,

Where Did All Goldman Sach’s (GS) Money Go?

Bloomberg is reporting that $8 billion Global Alpha hedge fund is down 26% this year and 40% since July 31. The fall is going to cost Goldman Sachs (GS) a lot of money. The fund brought in $700 million in fees in 2005. Obviously, performance that bad could lead clients to take money out of the fund.

All of that could undermine part of Goldman’s earnings and bring its stock down further. While Goldman’s shares are down a little over 15% in the last month, Bear Stearns (BSC) is off 20%.

If more bad hedge fund news comes out of Goldman, its share price could be down more than that 20% very quickly.

Douglas A. McIntyre

Posted on: August 12, 2007 – 7:47 am in Financial Stocks, ,

Politician And Pundits Look To $100 Oil

The prevailing wisdom is that oil prices will move down. They have already dropped from over $78 to $72, and most observers think that is only the beginning. Troubled financial markets and the potential of a slowing global economy should being demand down.

Don’t tell the president of Venezuela, nut job Hugo Chavez any of that. He wants the world to believe that he can control the price of crude, which is only partially true. According to Reuters: "I’ve always said that oil prices are headed straight to $100 per barrel," Chavez said during a televised speech. His argument is simple. Supplies are dwindling and consumption is still going up.

Chavez must be speaking with the oil think tank The International Energy Agency. Late last week the FT quoted the group as saying: ”Undersupplying the market in this context could bear considerable risks,” the IEA said, referring to ongoing Opec crude oil production cuts.

The question before the House comes down to this. Will troubled credit markets hurt the developed nation economies enough to bring oil down much further or will long term demand and lack of supply growth drive prices up?

Oil is going to $100.

Douglas A. McIntyre

Posted on: August 12, 2007 – 7:39 am in Oil & Gas