Apple’s Not a Marijuana Penny Stock

Jan 24, 2013
J. Webster
Comments Off on Apple’s Not a Marijuana Penny Stock

Everyone is shocked by Apple’s drop from $700 a share to around $450 a share in less than four months, and nobody more than Stocktwits Howard Lindzon, who stepped in and bought more shares of Apple right before their earnings release and was beaten down despite Apple’s $13.07 billion in pure profit. After the seemingly incredible earnings numbers Apple shares dropped over 12% and Apple longs like Lindzon were in a world of pain.

So where’s the bottom? Analysts argue it will come either as Apple falls to a point that the deep value guys simply can’t resist any longer or when the company releases yet another revolutionary product.

“Apple says it has not run out of ideas, and we think the stock discounts little innovation at these levels,” said Steve Milunovich of UBS in a note.

One thing all can agree on is that this has to be on one of the most confusing stocks to come down Wall Street in a long time.

“It is too good to be true,” remarked Howard Lindzon, investor and CEO of StockTwits, when looking at a list of these bottom basement valuation figures. “We are all missing something at the moment. You would think it was a marijuana penny stock.” (CNBC)

The Apple collapse is very odd because a company like Amazon is barely making a profit but hasn’t yet seen it’s stock price take any hits. Apple on the other hand, who now has $137 billion in cash, gets whacked when it’s earnings don’t continue to blow the market away. Plus, Apple now even has a dividend that’s creeping up higher and higher as the share price drops – it’s at around 2.30% today. So, you can understand why Lindzon is saying Apple’s being treated like a marijuana penny stock.

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