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Robert McDonald
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FROM INSIDE SILICON VALLEY: Sorting the truth or likely truth from the noise is a key attribute of the successful investor. My commentary is a distillation of some of this effort relative to particular stocks and investment areas. My publishing at this point in time is limited to the blogsphere,... More
    Mar 5, 2013 10:47 AM | about stocks: AAPL

    Apple's has been silent on how they are doing in the marketplace and new product status since the January earnings report. They have also been silent on any dividend increase or buyback increase with the exception of statements that cash management is very important and that they are studying the matter. This has done nothing but magnify the worry that investors may have and fuel the naysayer's with even more gasoline.

    And by the way, they tell us not pay attention to supply chain rumors, some of which have gone unanswered clear back to early fall. Well any investor who does proper due diligence is going to try to glean what they can from available information and is going to be looking to Apple for balance. Well balance points have been few and far between. We are talking months with unaddressed questions about the impact of all the new competition, alternative phone products, and cancelled or reduced supply chain orders. Now everyone is waiting on the edge of their chairs for a possible dividend hike and additional buyback in March because it happened last year at this time (March 19th). But this is simple act of faith and disappointment may take another chunk out of valuation.

    Well the media and the analysts are going to speculate and do various kinds of second guessing no matter what warning you give them about the complexity of the supply chain and so forth... and in the absence of positive contrary information from Apple, they are having a field day peddling sensational information that increases readership or ratings ala CNBC. Therefore we have the negative fire hose of information we all have been living with for more months than I care to count.

    Alternatively, other companies use shareholder meetings and events like the Goldman Sachs conference as a chance to communicate at least something on these matters. Just because Apple has never done this before does not mean it is not important to do so now. They are mouthing the words that the stock price is very important to everyone at Apple including top management and the BOD but yet they do nothing to quell the negative firehouse of information we are all bombarded with everyday. I think the time to break the silence is long overdue and not to do otherwise is a violation of fiduciary responsibility to shareholders. And does indeed make Apple management look inexperienced and weak, whether it is justified or not.

    As a result, Apple is having a significant shareholder exodus as evidenced by the falling share price. Some of these investors may not ever come back. "Burn me once but you will never get to burn me twice" may be the appropriate motto for this action.

    I call this a management and BOD failure that is of significant concern. It is time for folks in charge at Apple to call an end to this silence and take some action to retrieve Apple's image ownership back from the media and various pundits. There are many appropriate ways to do this without giving away secrets that may give others a competitive edge, in fact quite the contrary.

    Samsung must be laughing all the way to the bank.

    Needless to say I am one unhappy shareholder at this point in time. I am still holding due to my own beliefs in the soundness of management, Apple core competence and competitive position and some positive news here and there. But not because of reassurance from management, the silence is deafening. There hasn't been anything of real substance, just management posturing and nebulous statements. This feedback is not satisfying to a serious investor.

    Let's hope Apple takes back the talking rock soon.

    Disclosure: I am long AAPL.

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  • cytonychang
    , contributor
    Comments (107) | Send Message
    Excellent article!
    6 Mar 2013, 07:26 PM Reply Like
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