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Rather than getting into the financial market nitty-gritty's, when "bubble 2.0" hit, an Apple employee mentioned to me that they had an all hands. In that meet

Rather than getting into the financial market nitty-gritty's, when "bubble 2.0" hit, an Apple employee mentioned to me that they had an all hands. In that meeting, Jobs basically told them -- "your job is to execute on amazing products, our job is to make sure we have the money for you to do so. don't focus on financials, just focus on delivering" This is hearsay, clearly, but the point is obvious. Apple management wasn't worried about their near term financials, they were looking at the long game. While Jobs was an amazing focal point and product guy, I suspect the engineer culture at Apple is still focused on the long game. Yes, a stock drop of $700 to $450 is a big one, but what percentage of Apple employees are overly impacted by such a drop based on the rapid rise -- mainly those hired recently. Those that have been around awhile, I suspect, are in it for the long term.

TheAnimus 14y ago
I would suggest that the stock price of over 700 was a bit of market hype, rather than anything concrete. Stock prices are ment to be about the future earning potential, not so much the current. This is why Amazon has such a high stock price, despite making very small profit compared to say Apple. However it has come apparent to most investors that Apple is not really going to be able to see much growth, there was dare I say almost a blind hype, a bubble regarding the value of Apple. There is absolutely nothing poor about having a company with the market cap Apple has, they are cash rich, they have great revenue (who here wouldn't be stoked to own such a firm), but it simply doesn't match up to such a high price. Right now I think the price is held up by speculation of an iWatch which will once again become the must buy and potentially create an industry which has never managed to exist before (discounting luxury mechanical, or Microsoft's smartwatch, or the one that was on KickStarter). The question is, who ever thought it was worth $700 per share, where was that growth going to come from? People had gotten used to Apple being so disruptive, the iPhone I laughed at when launched, £1800 GBP it cost in the UK with the cheapest contract applied. Sat as the computer geek for a hedge fund desk we all scoffed at it, do they not know thats 1/10th of the average salary in the UK? They demonstrated that they could create something which was considered essential. I know students who are scraping buy, in debt, on maybe £6k a year, who will still own the latest smartphone on a contract which puts an annual cost of £500. When out in a rural part of Thailand (trying to de-stress and live like a digital nomad) A local bar owner explained you can tell the girls who are for rent, they own an iPhone 4S. Apple realised people will sell their bodies for such a device. I was one of the many people, perhaps with a little too much money for his toys to understand why someone would pay so much for such a thing. Then they did it again. Tablet Computers where not new, but ones that sold, and really sold were. If Apple are able to do this again, with the sucsess of the iPad in say the watch market, then frankly their current share price could be a steal. I don't think they will be able too, but what did I know, I was wrong the first time.
- Kurtz79 14y ago
  I agree, last year Apple and Google were at the same level and it did not make any sense : Google have their hands on so many more potentially profitable ventures, while Apple have been very focused on a small number of (highly successful and profitable) products. There is no real reason to hold a stock that does not pay dividends, except for its potential appreciation, and Apple at 700 was overly hyped indeed, given recent history and outlook.
  - michaelt 14y ago
    Google have many more ventures and customers - but Apple make a lot more per customer; some estimates [1,2,3] estimate multiple hundreds of dollars per iphone and ipad sold. Google makes what, a few dollar a year in adsense revenue? [1] http://www.zdnet.com/blog/hardware/apple-makes-big-bucks-profit-per-iphone-3g-s/4792 http://www.zdnet.com/blog/hardware/apple-makes-big-bucks-pro... [2] http://gigaom.com/2010/02/01/apple-makes-at-least-200-per-ipad-sold-report/ http://gigaom.com/2010/02/01/apple-makes-at-least-200-per-ip... [3] http://www.thestreet.com/story/11718458/1/heres-how-much-apple-makes-per-iphone-5.html http://www.thestreet.com/story/11718458/1/heres-how-much-app...
    - smackfu 14y ago
      And every one of those customer sales for Apple is hard fought against persistent competitors.
  - Maven911 14y ago
    Aapl does pay dividends now And based one of the most important metrics, price-earnings multiple, apple stock is a steal Dont let the four to seven hundreaad price tag fool you
    - TheAnimus 14y ago
      Where are you getting your data from? I don't have a BBG terminal sadly, so it's google finance. http://www.google.co.uk/finance?cid=22144 http://www.google.co.uk/finance?cid=22144 http://www.google.co.uk/finance?q=NASDAQ:MSFT&ei=Cr4wUdDlDc3FwAOyRw http://www.google.co.uk/finance?q=NASDAQ:MSFT&ei=Cr4wUdD... Apple P/E ratio, 9.82 Microsoft P/E ratio, 15.2 9.82 isn't particularlly growth stock territory, have a look at ones the market thing more highly of: http://ycharts.com/rankings/pe_ratio?p=1&s=calc&d=desc http://ycharts.com/rankings/pe_ratio?p=1&s=calc&d=de... (This is not intended to be any kind of buy/sell advice)

TheAnimus 14y ago

I would suggest that the stock price of over 700 was a bit of market hype, rather than anything concrete. Stock prices are ment to be about the future earning potential, not so much the current. This is why Amazon has such a high stock price, despite making very small profit compared to say Apple. However it has come apparent to most investors that Apple is not really going to be able to see much growth, there was dare I say almost a blind hype, a bubble regarding the value of Apple. There is absolutely nothing poor about having a company with the market cap Apple has, they are cash rich, they have great revenue (who here wouldn't be stoked to own such a firm), but it simply doesn't match up to such a high price. Right now I think the price is held up by speculation of an iWatch which will once again become the must buy and potentially create an industry which has never managed to exist before (discounting luxury mechanical, or Microsoft's smartwatch, or the one that was on KickStarter). The question is, who ever thought it was worth $700 per share, where was that growth going to come from? People had gotten used to Apple being so disruptive, the iPhone I laughed at when launched, £1800 GBP it cost in the UK with the cheapest contract applied. Sat as the computer geek for a hedge fund desk we all scoffed at it, do they not know thats 1/10th of the average salary in the UK? They demonstrated that they could create something which was considered essential. I know students who are scraping buy, in debt, on maybe £6k a year, who will still own the latest smartphone on a contract which puts an annual cost of £500. When out in a rural part of Thailand (trying to de-stress and live like a digital nomad) A local bar owner explained you can tell the girls who are for rent, they own an iPhone 4S. Apple realised people will sell their bodies for such a device. I was one of the many people, perhaps with a little too much money for his toys to understand why someone would pay so much for such a thing. Then they did it again. Tablet Computers where not new, but ones that sold, and really sold were. If Apple are able to do this again, with the sucsess of the iPad in say the watch market, then frankly their current share price could be a steal. I don't think they will be able too, but what did I know, I was wrong the first time.

Kurtz79 14y ago
I agree, last year Apple and Google were at the same level and it did not make any sense : Google have their hands on so many more potentially profitable ventures, while Apple have been very focused on a small number of (highly successful and profitable) products. There is no real reason to hold a stock that does not pay dividends, except for its potential appreciation, and Apple at 700 was overly hyped indeed, given recent history and outlook.
- michaelt 14y ago
  Google have many more ventures and customers - but Apple make a lot more per customer; some estimates [1,2,3] estimate multiple hundreds of dollars per iphone and ipad sold. Google makes what, a few dollar a year in adsense revenue? [1] http://www.zdnet.com/blog/hardware/apple-makes-big-bucks-profit-per-iphone-3g-s/4792 http://www.zdnet.com/blog/hardware/apple-makes-big-bucks-pro... [2] http://gigaom.com/2010/02/01/apple-makes-at-least-200-per-ipad-sold-report/ http://gigaom.com/2010/02/01/apple-makes-at-least-200-per-ip... [3] http://www.thestreet.com/story/11718458/1/heres-how-much-apple-makes-per-iphone-5.html http://www.thestreet.com/story/11718458/1/heres-how-much-app...
  - smackfu 14y ago
    And every one of those customer sales for Apple is hard fought against persistent competitors.
- Maven911 14y ago
  Aapl does pay dividends now And based one of the most important metrics, price-earnings multiple, apple stock is a steal Dont let the four to seven hundreaad price tag fool you
  - TheAnimus 14y ago
    Where are you getting your data from? I don't have a BBG terminal sadly, so it's google finance. http://www.google.co.uk/finance?cid=22144 http://www.google.co.uk/finance?cid=22144 http://www.google.co.uk/finance?q=NASDAQ:MSFT&ei=Cr4wUdDlDc3FwAOyRw http://www.google.co.uk/finance?q=NASDAQ:MSFT&ei=Cr4wUdD... Apple P/E ratio, 9.82 Microsoft P/E ratio, 15.2 9.82 isn't particularlly growth stock territory, have a look at ones the market thing more highly of: http://ycharts.com/rankings/pe_ratio?p=1&s=calc&d=desc http://ycharts.com/rankings/pe_ratio?p=1&s=calc&d=de... (This is not intended to be any kind of buy/sell advice)