Apple shows there are no accidents in the filings…
Two months ago, I took some hits from Apple fans who belittled the subtle change I had picked up (and footnoted) in Apple’s most recent 10-Q. One of those commenting — someone not brave enough to use their own name — told me to get a life and stop reading the filings (as opposed to spending time posting anonymously on blogs).
In the filing, Apple used stark new language to describe the current economic situation and its potential to have a “material adverse effect on demand for the Company’s products and services and on the Company’s financial condition and operating results.” The company also used the word depressed to describe consumer spending.
At the time, Apple was trading at around $160. Today — just over two months later — it’s trading around $110. The reason for today’s big drop? Two research reports from Morgan Stanley and RBC Capital Markets that came out earlier today which raised concerns about weakened consumer spending.
What this shows is that there are no accidents in the filings. I don’t know if the two analysts who downgraded Apple today read the last 10Q. But today’s new concerns don’t seem all that different than what Apple told its investors two months ago in the filing.
It’s these sorts of subtle, but actionable items that we’ll be focusing on when we launch FootnotedPro next week.
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September 29th, 2008 at 4:16 pm
Not to mention health concerns and chain of command issues!
You are doing us all a favor by watching over filings!
Keep up the GREAT work Michelle!
September 29th, 2008 at 11:12 pm
While I think the footnotes are critical in reading a 10Q or K, I think the ones you pointed out are boilerplate.
September 30th, 2008 at 12:15 am
@KenC: Sorry, but I don’t agree. When a major company that’s known for being a bit of a control-freak puts new language in their disclosures, it’s not accidental. It may not be as meaty as the other footnotes, but sometimes you find hints where you least expect them.
September 30th, 2008 at 12:33 pm
Hi Michelle,
Thank you so much for reading and commenting on the filings. I read footnoted.org every day, since I became aware of it earlier this year (wish I had known about it earlier…). Please keep up the EXCELLENT WORK!! And thanks, thanks, thanks again!
September 30th, 2008 at 1:51 pm
I have heard it all. But the simple facts are:
1) Apples are over-priced computers with a proprietary Linux based OS and a nice look.
2) iPods are over-priced USB flash drives or portable hdds.
3) iPhones, while novel, have too many issues, are over-priced, and its sales potential
is throttled by it’s exclusive AT&T distribution agreement. — And competitors are coming
at it from every direction.
Apple is a $60 stock at best.
October 1st, 2008 at 12:58 am
The boilerplate stuff is written by the lawyers. The CFO in the last two conference calls was specifically asked about how the macroeconomic concerns would affect sales, and made no reference to “depressed consumer spending”.
October 1st, 2008 at 1:02 am
@rjp, it’s too bad you don’t get the “simple facts” correct.
1) OS X is not “Linux based”, it’s Unix-based.
2) If iPods are overpriced USB flash drives, then the whole MP3 player market is the same. Can you play your music from your USB flash drive? No? Didn’t think so.
3) What are the “too many issues”? How is $199 “over-priced”? And, how are the competitors to the iPhone and different than all of the competitors to the iPod?
Why do you call your 3 points, “simple facts” when clearly they are opinion, with no supporting facts to be found.
October 1st, 2008 at 9:53 am
@Ken C: Totally agree that this is often boilerplate and written by lawyers. But when those lawyers start inserting new language, it’s important to put that into the mix. I have no skin in this game — I neither own nor short Apple (though I do own a Powerbook, MacBookPro and Iphone and a few Ipods). What’s interesting here is that the CFO said one thing in the call and the company said something else in the filings.
October 3rd, 2008 at 7:03 pm
I think KenC better refresh his techie brain cells. Both Linux and OS X adhere to POSIX, and feature CLI capabilities. Their GUI differences may set them apart from one another, but they both are generically Unix-based. To argue otherwise is to split the proverbial hair between the Senator and the Representative. One is merely more crooked due to his length of term in office.
October 12th, 2008 at 1:29 pm
Windows also offers Posix compliance and a CLI.
The difference between Linux and OS/X is the latter has intellectual property. How’s iPod and iPhone integration with Linux working these days? seen iTunes for Linux much?
the value in Apple is the brand, ease-of-use, and ability to own the growing digital media ecosystem.
bearish on Apple, but non-apple-dude may need to grow some techie brain cells LOL.