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Did Tim Cook Lie To Save Apple Stock: The "Channel Checks" Paint A Very Gloomy Picture
Back in February 2013, Thorsten Heins, then-CEO of what was once the iconic "smartphone" brand Blackberry, publicly lied that its Hail Mary iPhone competitor, the Z10, had "record" early sales. He told CNET, that "BlackBerry nearly tripled the sales of its best performance over the first week in the U.K., while it had its best first day ever in Canada. In fact, it was more than 50 percent better than any other launch day in our history in Canada."
Less than one year later, and less than two years after he was hired, the ruse was up - Blackberry's US market share has fallen from 50% to 3% in four years – and Thorsten was fired.
Fast forward to Monday morning, when the S&P500 had just hit its first limit down in history, stocks were crashing, countless ETFs were crashing more as ETF pricing models were corrupt and broken, the QQQs were plummeting, and none other than AAPL was set to open at a price of $92 wiping out tens of billions of market cap overnight.
It is then that AAPL CEO Tim Cook may have pulled a page straight out of Thorsten Heins' playbook when did something nobody expected him to do - he panicked, and emailed CNBC anchor Jim Cramer to do what the AAPL CEO himself admitted the company does not do by providing mid-quarter updates, and assure the CNBC anchor that there is no need to sell AAPL stock.
Specifically he said that:
"I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last 2 weeks."
Needless to say, this stunning intervention by Tim Cook to arrest the plunge in AAPL stock succeeded, and AAPL soared from $92 to close back over $100, a gain of nearly $60 billion in market cap, in turn dragging the entire market higher with it.
Yet what many have found problematic is that in emailing Jim Cramer with what was clearly material, non-public information - how long did Cramer have possession of Cook's email, who did he privately share the information with first, did Cramer trade on the information before going public with it, etc - Cook may have breached Regulation FD.
We wondered as much in our Monday post "Did Tim Cook Violate Regulation "Fair Disclosure" By Emailing Jim Cramer To Save AAPL Stock This Morning." Nearly a week later, there is still no 8-K, even if grotesquely delayed, with what should clearly have been a replica of the statement made by Cook to Cramer.
So we decided to follow up.
What we uncovered may explain why Tim Cook did not want to publicly file his "all is well" email to Cramer: the simple reason is that Tim Cook may have simply been lying in order to halt the rout in his stock, a rout which incidentaly had little to do with concerns about AAPL's Chinese sales and was driven by the latest HFT-facilitated marketwide flash crash as we described previously.
Of course, accusations that Tim Cook is lying should be taken very seriously, which is why instead of relying on Thorsten Heins' pardon, Tim Cook's self-assessment, we went with the latest AAPL channel check out of GFK, Germany's largest market research institute.
For those who are unaware, GfK is almost universally accepted as the best source for end-market demand, collecting and aggregating point of sale data from servers at all major retailers, collecting real time consumer data, as well as conducting manual channel checks at smaller retailers. In short: if something is selling with an upward trajectory, GfK will know about it, with about an 80% confidence interval. And vice versa.
Here is the latest GfK data on Apple:
C3Q15 sell-out outlook:
- Apple’s global ex-NA outlook worsened slightly with the additional JUL/AUG weekly data. Units are now forecast to grow +2.6% q/q (prior +3.0%). Softer early AUG trends in China were only partially offset by resilience in Dev. Asia.
- In China, iPhone 6 demand softened in the final week of JUL, and remained at such levels in AUG weekly data (Figure 17). Apple, as a result, is expected to see more pronounced share loss in China than prior expectations, though units are still expected to grow +62% y/y.
- In Japan, iPhone 6 improved meaningfully in AUG despite no material ASP movements. Sony’s Xperia Z4 was most impacted following its short-lived demand uptick in JUL (Figure 18).
- Apple’s 3Q ASP is expected to decline -3.1% q/q (prior -2.5%); +6% y/y.
US iPhone demand
- Apple lost share m/m in final JUL data, with iPhone 6 & 6 Plus unit demand declining -14% m/m. This was worse than the -7% m/m decline seen for the 5s/5c in JUL-14 and was also weaker than GfK’s expectations.
- Apple’s US smartphone share fell, as a result, to a level below that seen LY (Figure 20).
- The downtick was more pronounced for iPhone 6 and drove the 6/6 Plus ratio from 4.2:1 in JUN to 3.8:1 in JUL.
- iPhone 6/6 Plus continues to significantly outperform the 5s/5c launch to date, with units +22%, only modestly below the +24% growth seen through JUN.
C3Q15 sell-in projection:
- 49.4m; +4% q/q; +26% y/y (prior 50.6m, +7% q/q; +29% y/y)
- International sell-out: 37.0m, -0.3% q/q (prior 37.2m, +0.1% q/q); +39% y/y (unchanged)
- US sell-out: 11.4m, +4% q/q (prior 12.4m); -2% y/y (prior +7%)
- Inventory build of 1.0m units (unchanged)
- Shipment ASP projection: USD667, flat q/q; +10% y/y (unchanged)
* * *
While the above data has a roughly 2 week lag, but considering the explosion of market volatility into the past two week period, it is certain that sales , if anything, deteriorated as the Shanghai Composite went red for the year (after soaring 60% two months ago).
So what can we make of the above data? Here are GfK's highlights:
- The Q3 outlook for Apple has softend notably as a result of weaker trends not only in the US, but in China - the place where Cook assured Cramer Apple has "experienced strong growth in its business."
- US unit demand declined 14% in July, far more than the -7% drop a year prior, and weaker than GfK's own expectations. This could point to substantial weakness over the next 6-12 months for Apple, considering last year, ahead of the iPhone 6 launch, the sales decline was about half of the current decline even without a major new phone rollout imminent. This may mean that the upgrade cycle was much stronger and/or shorter until now, and is starting to fade dramatically.
- The data started deteriorating before the recent rout in Chinese stocks and EM currencies (which make products such as the iPhone more expensive). Keep in mind most of the future growth for Apple is expected to come from Emerging Markets and China now that the US only accounts for a third of total sales.
So did Tim Cook lie?
If one uses channel check data to objectively determine end demand, the answer is a resounding yes. To be sure, Cook may be telling the truth in a very narrow sense, if Apple is simply be resorting to the oldest trick in the book at this point: channel stuffing.
The problem with channel stuffing is that it only allows you to mask the problem for 2-3 quarters at which unless there has been a dramatic improvement in the end-demand picture, it re-emerges that much more acutely: just ask AOL which was channel stuffing for months on end, only to be ultimately exposed, leading to a epic plunge in the stock price.
So is AAPL the next AOL, and is Tim Cook the next Thorsten Heins?
It all depends on China: if the world's most populous nation can get its stock market, its economy and its currency under control, then this too shall pass. The problem is that if, as many increasingly suggest, China has lost control of all three. At that point anyone who thought they got a great deal when buying AAPL at $92 will have far better opportunities to dollar-cost average far, far lower.
Oh, and to anyone still holding their breath for AAPL to file a public statement which may well contain an outright lie, you may exhale now.
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Queers Lie that's what they do , Cook and Obama both like it up the pooper they are both confused sons of bitches and they can not but Lie with every fucking word.
"Shenanigans" on the allegations about BlackBerry. Or for those unfamiliar with South Park, "bullshit, it didn't happen." Heins left but not for lying.
I'll bet Bezos and Cook are slathered in oil in some dank San Francisco bath house scheming for a way to iDrone the bankrupt middle class this Christmas.
Where can I get a NINJA loan on some iShit?
When 90% of the public says "Who the fuck is Christy Turlington?" you know AAPL finally jumped the shark with this idiotic watch thing.
Job's genius was in making stuff you actually need, and that more or less worked.
It's true that AAPL now throws you and your i-thingie under the bus after a couple of years.
Jobs was Apple.
Final proof... Cook slurpin' with Cramer.
So I had to google Christy Turlington...
Isn't she an old model or something? I don't care to google her.
http://m.youtube.com/watch?v=ndjedaoDcDE
halarious HITLER STARTS USING WINDOWS 10- video out there and finds it also connects the the British Secret Service!
https://www.youtube.com/watch?v=KdORBuOdnjc
http://www.techrepublic.com/article/windows-10-violates-your-privacy-by-...
How many $800 iphones does Apple think they are going to sell in China when the average worker's wage is $5,000 a year?
In Beijing, the highest paid workers are in IT and they earn $1,500 a month.
Apple can offer 3 year vested stock shares to earn a i5 refurbished phone. Always turn bloating inventory you cannot sell parts for in aftermarket gains into ESOP. Could borrow GM'S (Generic Motors) employees EDP.
Employee Discount Program Overview | GMFamily First
Don't forget all of those iphone 5c that "have sufficient inventory to meet market demand" -- another favorite Cookism.
Consider two things: Tim Cook spent most of his life time in closet, IE lying.
Also iPhone 6S comes out in couple of weeks, so now it's prudent to hold off with purchase, hence slowdown.
The problem I think is that Apple no longer innovates and iPhone costs 3-times more than equivalent competition phone. I don't think they'll be able to sustain their high price and hipness factor in long term.
Tim Crook?
2 weeks is really all he is talking about. I thought it was a setup when i read what he said.
I'm sure Timmy has different colored (no doubt Martha Stewart pastels) panties for every day of the week...Sunday...Monday...
Karl Denninger is a fanboi for BB-as the company implodes, he keeps pushing it like Cramer would do
by the way is there any PROOF that Tim cook called cramer or is this another Bullshit rumour put out by a dying Microsoft-their Surface and Windows phone are going the way of the ZUNE-and its ALL OVER the web that Windows 10 leads straight to the NSA and CIA ......google W10 and see all the negative reviews
BTW Tyler-Have you stopped beating your wife yet?
Can the NSA Break Microsoft's BitLocker? - Schneier on Security
I wouldn't touch anything Windows with a 50ft. barge pole. I'm happy with linux and all it's open source functions and software.
Once you master the terminal, you'll never look back.
sudo bite-me NSA
Dreadbedwetter,
We enjoy our BlackBerry phone. Stop wife beating your iDiot OS phone.
IDIOTS - iPhone Parody - YouTube
Start with the Passport.
?????????? ???? ???? ???? ??????? - BlackBerry Passport ...
Iwatch Icult incinerate Icahn's investment. Iceberg imminent in Iphone.
I have a unique perspective on Apple having spent a number of years off and on with the company. I have seen a lot and witness Jobs's brilliance. When Tim Cook was moved up.....I knew was waiting at the end of the road. I worked my way out of involvement with the company and held on to stock...a the same time, I kept an eye on the TECH PEOPLE WHO WERE ALSO CREATIVE PEOPLE guiding platforms like iTunes who were part of the Jobs' agenda as Jobs was fading because of his illness. They, to me, were the key to the future. Tim Cook could never fill Job's shoes because he NOT a creative person ....and much more an engineer and tech guy. Moreover, I felt his "life-style" was more important to him than the essence of what Apple is all about..... You can see the end result if you re-trace what Apple has done over the past ten years. Much of this is merely running out what Jobs was trying to do.... But, Cook is not a creative person who serviced the creative community who MADE what Apple was, is and will be....when a better. more creative, less-San Francisco-icon cruiser takes over.
Bottom line is that Tim Cook had made bad decision after bad decision in regards to hardware and software over the past 10 years...these creative tools have gotten weaker and weaker. That said, he has done great things with the operating systems.... a great job. But, Apple HAS to get back to being the best at creative hardware, software and operting tools...and I am talking SERIOUS hard-core creative tools that are cutting edge. He has done a pretty good job ...but he is SLOW in the processes.
So, Apple will wallow until they bring in a great young technical leader who is first and foremost a person with a passionate creative core. Apple has had a couple of really good candidates who have left for Google and Dropbox because of Cook's laborious management style. If Apple will wise up and bring these folks back in and turn the company over to them....it will expode and thrive. If, on the other hand, Cook stays....it will stall....and that will be a very sad day indeed.
http://www.theliberist.com
Tim Cook is a closet style progressive entrepreneur. He take's more ass than he can steal.
PatriotFrist1776--excellent post. But, I disagree with you on the OS. It is fubar, and so is iTunes and Safari. Don't get me wrong, I am a former (yeah, worst financial decision I EVER made) Apple shareholder and GM of an Apple Dealership in the SF Bay Area. I am generally an early adopter, and have a 27" iMac loaded to the gills and an iPhone 5s, so hopefully I won't get labeled as a Fanboy since I'm 66 years old. What galls me is the outrageous prices for new iPhones, and the piss poor marketing of the high end Apple MacPro. Steve Jobs would be appalled to witness the folly of Project Titan, which I think will be the biggest waste of Apple's resources EVER. That's my two cents.
Sarcasm at the Nukepro
Radiation is a conspiracy theory.
Just because we've seen a couple UME's and multi-species die-offs along the Pacific since 2011 doesn't mean anything, its only been
birds,
whales,
dolphins,
walrus,
sardines,
herring,
needlefish,
smelt, …………
drop your own sarc please
http://nukeprofessional.blogspot.com/2015/08/radiation-damage-to-pacific-is-just.html
When a carrier announces a new iPhone program where you can upgrade to the newest iPhone every year, you know things aren't going great.
Sprint has the iPhone forever program. You pay $25-30 a month for your iPhone lease and every year you pick up a new one.
The iPhone 6 was one of the most incentivised phones in history. All the major US carriers had free iPhone programs if you turned in an old iPhone, buy one get one, and discounts on contracts if you bought an iPhone.
Sprint's $10 a month discount on their unlimited plan should never have been allowed. But many people switched to an iPhone to save $10 a month.
Apple has lost China to Xiaomi, 1Plus, and Lenovo. Xiaomi will become the #1 smartphone company in the world by 2017.
Superior phones to the iPhone can now be bought for $250 unlocked and contract free. Lenovo is releasing the $399 Moto X Pure that will work on every carrier contract free. You can expect this phone to sell for $299-$350 on sale. Anyone paying for an iPhone is doing so to be part of the iclub, not because of pursuing the best hardware or experience.
At one time everyone had to have a Nokia, then a Motorola RAZR, then a Blackberry, and then an iPhone. Very soon everyone is going to have to own a Mi 5.
Excellent comment very true
Tim Cook is one of the few people that hopes this will come back and bite him in the ass.
U winz de internets for the day
+ 1 for that comment got a good laugh from that
We are having a sale on 1oz silver american eagles rounds, just 13 euro per coin.
https://www.eurgold.eu/silver/american-eagle-1oz-silver-coin-1-dollar-legal-tender-2015/
Kind regards
Shane
EurGold
Freedom of speech, you can say whatever the fuck you want, whenever the fuck you want.
Im worth trillions of trillions! (in zimbooboo dollars).
It is more than questionable that the future of AAPL hinges on the Chinese stock market. But it certainly hinges on the sales in China, which might fall if consumers attitude change (there are chinese products at a better price / performance ratio available) and the Chinese goverment might put foreign competitors at a disadvantage. Consumer appliance companies rise and die and AAPL is not going to be an exception.
Ah, the Apple lyPhone is coming on September 9.
But this is August 29th.
Beserkness is creepin' up on me. Kind of like a porcupine bristlin' up on ye.
Kinda like a skunk stomping his feet?
Are you hinting that Tim "cooked" the books?
With flavored K-Y Jelly. Semen and chocolate mixture. His and his brand.
What we are witnessing here is the failure of the flagship Jobs's strategy of the imprisonment of the Apple disciples into so-called closed ecosystem (Apps, ITunes etc.,) while outsourced all the jobs which paychecks that are required to purchase the overpriced Apple gadgets, not one iota better than other manufactures since the parts are the same.
Just think the Apple already exaggerated total cost of one iPhone to about $215 and if all the production and design is moved to the US it would cost about $245; WTF, Why the Cook-ing scrooge is holding on $150 billions cash dodging the tax.
Now the so-called innovative Apple has to pay dividends and desperately do buybacks? and get in Debt. Just to Cook up the stock price. What the hell.
Soon when the apple again would mean a round fruit like before, the only innovation of the forgotten Apple Inc. that may have contributed to humanity is the USB standard, the only one thing they devised to open their gulag ecosystem to the world.
The rest will be lost into oblivion.
More on those geniuses of absurd and extortion can be found here:
https://sostratusworks.wordpress.com/2015/01/08/smell-of-silicon-madness/
Of course the cunt is lying..
He sucks obummers dick and hes a fucking faggot.
The shitty little faggot toy designer company that makes its overpriced cheap jack shit in Chinese sweat shops is a fucking ponzi fraud through and through.
Leave the fucking half wits and the dumbo faggot fanboys, which incidentally, wearing a crapple faggot bracelet in China now gets some serious doubts raised against you, and Chinese are not exactly falling over themselves when it comes to fucking faggots, are pretty quick on the uptake and been dumping that shit fast now.
Check out the shipping insurance register for the latest claims on containers dumped overboard in the South China sea and see how many were crapple containers trying to hide the channel stuffing by burying it at sea.
Isnt that fucking insurance fraud you fucking cock sucking faggot, ..
Are you listening cook ..you corrupt little faggot
the bigger question is: "Who gives a fuck?"
false fag will love it in jail.. I think he dropped that soap on purpose
Didn't know that Muppets still are watching Jim Cramer.
That sales data is not taking into account the spectacular apple watch sales. BWA HA HA!
I knew since beginning that Tim will never be like Steve, he simply dont have it in him to lead such creative company with same standard and new original ideas. But now, he even appear as fraud. Weak blood I say.
To be realistic, to compare AOL and Apple together is pretty low IQ. AOL started up as internet company at the dot com era. The (Arsehole On Line) company has no substance, no intellectual assets, no hardware infrastruture to support their software. AOL was much easier to compete than Apple. AOL is just another Twitter, Facebook, LinkedIn, etc. Try to imagine setup your product lines to compete iPod, iPad, iPhone, Apple TV, Mac book, iTune music. Apple has built up a huge margin that make a lot of companies envy. How many Dell, Lenovo, laptops have to sell to make the margin of one Apple Mac book??
However, Apple products are going downhill. I am still using an iPhone 4. Would I upgrade my iPhone? Hell no. They only interest to sell hardware that have a short sell by date. After that, it becomes very slow and next to unusable. That would be the same with the twat watch product line. The only product that I will continue to purchase from Apple is Mac Book Pro, nothing else.
Final words: Apple will fall but NO WAY it will fall like AOL. AOL was a suicidal company.
You'll go to iPhone 5 or 6 when your battery goes belly up....which incidently you can't replace thanks to Job's insight on this matter.
https://www.youtube.com/watch?v=Hd3dtOtdTR8
RIP Steve Jobs. Just because I never liked your products, always respected you. Tim Cook is not following your vision. In fact, he will sell company to another M&A at any price to golden parachute.
Tim can retire in his fudgepacking lifestyle and eventually tell everyone he has contracted aids.
Tit for tat.
Bill Gates reply when asked to speak about SJ death: "er....he died, didnt he?"
He should have emailed it to Martha Stewart....
tim cook would not lie about this, zh is going to eat crow
pending gadget company fail
world's move valuable company makes gadgets
FKT UP WERLD!!!
YAWN....in other news, the Titanic sank yesterday. you paid by Microshit?