“One week ago, I came out with a bullish report that advised readers to buy Apple (AAPL) before earnings. Though the shares have fallen since last week, I maintain that buying AAPL before earnings is the right move,” Jason Cimpl, Wyatt Investment Research, writes for Yahoo Finance. “In an unfortunate bit of timing, the Wall Street Journal reported that Apple was slashing parts orders on the same day as my bullish article. Initially, the WSJ claimed Apple was cutting iPhone parts orders by half from 65 million during the March quarter.”
“Though most investors turned negative on Apple, some devotees haven't changed their colors. In fact, a large portion of the investor base believes the stock was a victim of manipulation,” Cimpl writes. “BGR's Tero Kuittinen was among the first to challenge the numbers from the WSJ article. Kuittinen explained that the consensus sales estimate is 52 million iPhone units for the first quarter. The March quarter is soft (seasonality) and most analysts expect around 30 to 40 million iPhone unit sales.”
Cimpl writes, “Kuittinen rightfully questioned where the 65-million iPhone 5 number came from. Unit sales were never expected to be that high. Only 52 million unit sales are expected in Apple's strongest quarter. And roughly 85% of that figure will be from the iPhone 5. So why would the WSJ expect 65 million from the weakest quarter? The fishy part, as Kuittinen claimed, was that ‘the current version of the WSJ article no longer cites the 65 million unit figure. Sometime between Sunday at 8:00 p.m. EST and Monday at 7:00 a.m., the Journal decided to drop the number from its article. But if the 65 million number is not right, is the estimate for halving March orders correct?’ I'd agree that the 65-million number came from left field.”
MacDailyNews Take: The 65 million unit figure didn’t come from left field, it came from Japan’s Nikkei.com. The WSJ‘s error was in carrying the FUD in the first place. Dropping only the actual number was even stupider since it’s the number that makes the revised production orders look large.
As we wrote last Wednesday:
Here’s a snippet from the WSJ‘s yarn:
Apple Inc. has cut its component orders for the iPhone 5 because of weaker-than-expected demand, people familiar with the situation said Monday, indicating sales of the latest smartphone haven’t been as strong as anticipated... Japan’s Nikkei reported Monday that Apple has slashed its orders for iPhone 5 components. – Juro Osawa, The Wall Street Journal, January 13, 2013
We questioned this “weaker-than-expected-demand” bearshit conclusion that was initiated in the Nikkei FUD and repeated ad nauseam in the days afterward the second we read it. Why didn’t The Wall Street Journal?
We are left with five questions:
Who planted the FUD at Nikkei?
How much money did they make, if indeed they did make any money?
Who approved the publication of this poorly-sourced, unsubstantiated, rife-with-speculation tale at the WSJ?
How much money did they make, if indeed they did make any money?
Just how much noise will the SEC sleep through?Contact info:
- Editorial Inquiries at Nikkei.com: ecntct@nikkei.co.jp
- Juro Osawa: juro.osawa@wsj.com
- WSJ Letters to the Editor: wsj.ltrs@wsj.com
Read more in the full article here.
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