Daily Archives: July 12, 2008

Apple (AAPL) Reports 3G iPhones Aplenty, Which May Be Bad News

Apple (AAPL) is not sold out of the new 3G iPhones. Based on data from the company, consumers can find them in almost every Apple store. Reports are that Apple’s carrier partner AT&T (T) is not as lucky.

Was Apple smart? Perhaps it ordered a huge number of the handsets. But, why would it under-supply AT&T? Or, did the initial demand for the iPhone fall well short of the mark?

Bloomberg also reports that “The Apple retail store likely has your iPhone 3G in stock,” Cupertino, California-based Apple told visitors on its Web site. “Shipments of iPhone 3G arrive most days.”

Apple shareholders should hope that the company simply anticipated the early customer traffic and did a good job of inventory control. The alternative is bad news.

Douglas A. McIntyre

Posted on: July 12, 2008 – 1:48 pm in Consumer Electronics, ,

Short Bets Against Sirius (SIRI) And XM (XMSR) Take Off

Short sellers seems to think the either the merger between Sirius (SIRI) and XM Satellite (XMSR) will not go through or that it will be too late for the financially crippled companies.

Short interest in XMSR rose 5.3 million shares to 28 million for the period ending June 30. The short interest in SIRI was up 5.9 million to 153.9 million. It now has the second largest short position of any stock traded on Nasdaq.

Although the FCC has signaled that it will approve the merger, Wall St. is concerned that the restrictions put on the new company will be onerous. They may not be able to raise the rates that they charge subscribers. With their unit sales slowing, the ability to move prices up could be critical to the financial health of the merged operation.

Even if the marriage is approved, each company has well in excess of $1 billion in debt. Their bonds have a "junk" rating, so raising more money may be difficult. Current shareholders would certainly face tremendous dilution.

The companies are also bedeviled by the fact that their major source of subscribers is new car sales. With auto sales in a downturn that could easily last another two years, it is unlikely that satellite radio growth will be robust.

Advantage to the shorts.

Douglas A. McIntyre

Posted on: July 12, 2008 – 7:58 am in Short Interest, ,

Starbucks (SBUX) Store Closings For July 2008

Here is the list of stores that Starbucks (SBUX) will close in July 2008.

Starbucks plans to close a total of 600 stores and lay-off 12,000 full-time and part-time employees in an effort to save money now that its US same-store sales are slowing considerably.

Based on information obtained by 24/7 Wall St., Michigan, one of the hardest hit states in the economic downturn, will lose 20% of its Starbucks stores.

Douglas A. McIntyre

Posted on: July 12, 2008 – 5:12 am in Food,