Wall Street and stoopid media stories: Apple, Inc.
Posted by apropos of mustard on January 24, 2008
As we have briefly pointed out, people no longer think for themselves. This herd mentality is most often seen on Wall Street, where a slight whiff of panic, real or imagined, tanks the market. Over the last three or four weeks, we’ve seen a significant sell-off in the stock market in general, for very legitimate reasons. Mostly due to the outrageous economic policy being driven by the current administration. There are other places to go to learn about economic policy – we don’t have a favorite, just a few off the cuff.
Anyhow, let’s look at one of the major darlings of Wall Street over the last few years: Apple, Inc. The market capitalization of Apple, Inc. has taken a big hit so far this year, losing somewhere over $50 billion. Apple is fairly predictable around this time of year, with a usual run up as their annual MacWorld conference/expo happens, and a corresponding sell off during or shortly after the keynote by their CEO. This year was no exception. Couple that with the general bearish attitude these days, and Apple’s share price dropped more than usual.
What is ridiculous, however, has been the overreaction to Apple’s financial results announced after market close on the 22nd of January. They had the most profitable quarter in the 31 year history of the company, and provided fiscal 2nd quarter guidance to the street that was not in line with “expectations”. Within minutes of the announcement, Apple shed over $14 billion in market cap in after-hours trading. Why? Because CNBC and other media outlets overreacted, and lots of people listened without really looking into the numbers behind the panicky statements. MacWorld has an outstanding look at this irresponsible behavior, by way of MWJ as published by MacJournals.com. Read it here. It’s rather long, but very interesting and worth the read.
Ugh.
