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Apple after hours are down 6%. Analyst do not like the short term stock growth prospects.
by loso 13y ago
Apple after hours are down 6%. Analyst do not like the short term stock growth prospects.
- JonFish85 13y agoThat and the iPhone number missed analysts' expectations, apparently.
- nailer 13y agoAnalysts were all totally bullish - http://www.washingtonpost.com/business/technology/apple-shares-up-ahead-of-earnings-report/2014/01/27/047cb58a-8764-11e3-a5bd-844629433ba3_story.html http://www.washingtonpost.com/business/technology/apple-shar... and http://appleinsider.com/articles/14/01/27/earnings-preview-wall-street-expecting-record-iphone-ipad-sales-from-apples-q1-2014 http://appleinsider.com/articles/14/01/27/earnings-preview-w... and any result older than the last hour for 'Apple earnings' on Google. The iPhone numbers missed expectation, and as Apple's main product it didn't look good. http://www.businessinsider.com/apple-q1-earnings-2014-1 http://www.businessinsider.com/apple-q1-earnings-2014-1 EPS, Mac and iPad all did well.
- swombat 13y agoI agree with Gruber that the "missed expectations" expression is misleading. Analysts' expectations were not in line with reality. The iPhone numbers are what they are, irrespective of incompetent analysis. A fairer way to state this would be that analysts, as usual, were over-optimistic and this optimism caused a lot of investors to be overly optimistic too, which caused an over-inflated share price, now corrected.
- 37prime 13y agoHow in the world anyone should rely on analysts’ expectations? These analysts were just guessing and almost all of them were guessing wrong in the past. It is akin to predicting to the scores for NFL Football game.
- Perceval 13y agoThis happens every single time Apple gives an earnings report. AAPL rises before the report and falls after the report. If I had the money I would short the stock every single time.
- Nrsolis 13y agoThat's not how shorting works. You short the stock and NOW YOU HAVE THE MONEY but you OWE the stock to whomever you borrowed it from. If the stock goes up, you lose. If it goes down, you use the cash you have to buy it back and keep the rest.
- Perceval 13y agoI don't have the money to lose if the stock goes up.
- baddox 13y agoAnd that just means you aren't actually that confident about your prediction, just like the rest of the market.
- Nrsolis 13y agoBOOM. The price of that uncertainty is what you capture in the options pricing model. aka. "premium" Two scenarios: (Short-selling) AAPL: Sell 10 lots (1000 shares) short -> now you OWE someone 1000 shares but have the cash in your account of 1000 shares worth of AAPL stock. The next day, AAPL loses 99% of its value, you buy the shares back at their now 1% value, deliver them to the person you borrowed them from, and keep the rest of the cash in your account. OR, the next day, the shares DOUBLE, and now you owe that person shares that are worth twice as much as you got selling them in the first place. Bad news. Nearly 100% loss on the trade. (Buying a Put Option) You buy 10 AAPL PUT contracts (100 shares each) "at the money" (strike price equal to the last sale of AAPL) for $XX that expire at some point in the future (lets say one month). Anytime between now and then, if the price of AAPL doubles, your PUT OPTION may most-likely will be worth more than what you paid for it and you can sell it for whatever the market wants to pay for it. If you do nothing, at the end of 30 days, your option is worth exactly ZERO. The difference in the price movements of the underlying securities in both scenarios is what makes up the premium you pay OVER AND ABOVE what the difference is between what the security trades at and the price you paid for that "option" on the security.