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Tim Cook Told Employees In A Secret Meeting. Subject: Apple’s Tanking Stock Price

January 28, 2013

Tim Cook Told Employees In A Secret Meeting About Apple’s Tanking Stock, according to Nicholas Carlson.

Apple shares are more than 36% off their 52-week high of $705/share, down to $447/share following last week’s quarterly earnings miss. This sharp decline has suddenly made Apple no longer the world’s most valuable company. Perhaps confusingly, this is all happening as Apple posts the biggest profits of any non-oil company ever.

What’s happening is:

+ Apple’s business, powered by the incredible growth and profitability of the iPhone business, has reached a summit, and, while it is still growing, it is growing at a slower pace than it used to.

+ Since stock prices are a reflection of where Apple is going, not where it is or where it has come from, Apple’s stock price is going down. Naturally, this very-good-and-very-bad moment has sewn some turmoil in the ranks of employees at Apple.

+ Hoping to calm those worries, and rally them for a great 2013, Apple CEO Tim Cook addressed the troops last week. 9to5Mac’s Mark Gurman had sources on the scene, and has written an excellent report of the meeting.

Here are the highlights:

+ Cook told employees: β€œwe [Apple] just had the best quarter of any technology company ever.”

+ Cook said: β€œThe only companies that report better quarters pump oil. I do not know about you all, but I do not want to work for those companies.”

+ Cook admitted that Apple’s stock is in bad shape, but said that making new products had to be the priority. He announced new perks for employees, including steeper discounts on iPhones.

+ Cook said that Apple wants to be even more transparent about Chinese labor issues. β€œWe want our partners to be as ethical as we are.”

+ Cook said that Apple retail employee satisfaction is too low, and that a search for a new head of retail is still on.

+ Cook said that while Android may have more market share, iOS has more Web traffic and usage. He said that Android’s metric of success marketshare, and that Apple’s is usage. He trashed Android’s fragmentation.

+ Cook told employees that if you split Apple’s businesses into separate companies, each would rank on the Fortune 100.

AAPL, Jan 28,2013, as of 10:49AM
450.82, Change +10.94 % Change, +2.49%

IMHO, the traders are all over APPL with its wide swings in prices… However:

+ For an investor, unless you think the world is comming to an end, and soon (OH, I forgot that was Dec, 2012), Owning Apple shares $450/share or thereabouts, is not a terrible place to be;

+ Presently priced, it represents a little over 10 times earnings, low based on other very mature enterprises;

+ Apple is a company that increased its iPhone Smart Phone market share from 37% in 2011 to over 50% this year, 2012; With further innovations and new releases, market share will increase further…

+ Look at what happened with iPhone5 with 1/2″ increase in screen size… huge demand…

+ Add another even larger screen of say 4.8″ and make the market whine with envy, as more folks flock to Apple’s quality and their App Store, the magic behind the scenes.

+ Apple is a company that is earning more than any other (non-Oil) Company in the NySE…

+ Sooner or later investors will over-come the short-traders, and APPL at $450 presently priced, will climb again.

+ Almost any other company, with Apple’s earnings history would be trading at over 15x to 20x earnings…

+ Investors, that’s about $700 to $900 range. Not a terrible place to be…

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  1. Great site. Plenty of helpful info here. I’m sending it to several buddies ans also sharing in delicious. And naturally, thank you in your sweat!

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