Apple: Back Below $50? (AAPL)
The negative news is mounting for Apple.
The company is facing two shareholder suits over the dating of options given to company executives, but that is unlikely to make much difference in the share price given the extent of the damages is probably limited to the difference between the stock price on the grant date and the date that the options were actually priced. Apple's large cash position is not likely to be affected much.
The real issue at Apple is the iPod. Several analysts and press reports now indicate that iPod sales will fall well short of projections for the second quarter of the calender year, primarily because Apple did not bring out new versions of the multimedia device to boost sales.
In addition. Microsoft plans to have its won multimedia device to compete with the iPod by Christmas. Although Microsoft does not have much of a track record with new products beyond its operating system, server software, and Office, the large software company will probably spend several hundred million dollars to create and market the new device. As Sony learned when Microsoft launched Xbox, Gates & Company are willing to lose large sums of money to attack a market.
If Apple does miss Wall Street's iPod targets on top of the balance of challenging news, the companies shares may go back below $50, a level the stock has not seen since September 2005.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
The company is facing two shareholder suits over the dating of options given to company executives, but that is unlikely to make much difference in the share price given the extent of the damages is probably limited to the difference between the stock price on the grant date and the date that the options were actually priced. Apple's large cash position is not likely to be affected much.
The real issue at Apple is the iPod. Several analysts and press reports now indicate that iPod sales will fall well short of projections for the second quarter of the calender year, primarily because Apple did not bring out new versions of the multimedia device to boost sales.
In addition. Microsoft plans to have its won multimedia device to compete with the iPod by Christmas. Although Microsoft does not have much of a track record with new products beyond its operating system, server software, and Office, the large software company will probably spend several hundred million dollars to create and market the new device. As Sony learned when Microsoft launched Xbox, Gates & Company are willing to lose large sums of money to attack a market.
If Apple does miss Wall Street's iPod targets on top of the balance of challenging news, the companies shares may go back below $50, a level the stock has not seen since September 2005.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
posted by douglas mcintyre at 5:33 AM
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