Apple

The quarter AT&T loses iPhone exclusivity is the quarter they report record numbers. Why? They started pushing high end Android phones that more than made up for the iPhone loss. You really can't compete with "less than free"!

In a filing released as part of the company's lawsuit against Samsung for design copycatting, Apple disclosed sales numbers through March 2011 for its three key marginal product lines: the iPad, iPhone and iPod touch. Since these numbers come out one day ahead of AAPL's earnings release (after close tomorrow), they promise to have quite an impact on Apple's stock. In summary: the company appears to be running short of Wall Street's estimate for iPad sales, while being ahead of consensus in iPhone sales. Apple also disclosed its iPod touch sales. It is unclear whether these are sales as of the beginning or the end of March (or some point inbetween), although with the filing hitting the docket on April 15, it may well have been a full Q2 number.

Contrarian, yet common sense, perspectives on Apple that so few seem able to see.

In what could easily be the biggest news of the day, even more important than the most recent Chinese rate hike, the one stock that determines the broader stock market level more than any other, Apple, may well get crushed today as index arbs dump it following news that the Nasdaq 100 intends to announce a rebalancing which will see AAPL drop from a 20% to a 12% weighing. According to the WSJ, the move is akin to what various exchanges do when they hike margin rates to prevent commodity prices from surging: "The rebalancing was driven in part by the seemingly unstoppable rise in Apple shares, which are up more than fourfold in the past two years. The tech company's big weighting means that a change in fortune for the maker of iPhones, iPods and iPads has a huge impact on one of the most heavily traded indexes in the market. After the rebalancing, which takes effect May 2, Apple will make up 12% of the Nasdaq-100." Whether this will be the end of the company's relentless rise remains to be seen although any impairment in the sensitive ecosystem of technical factors that has so far prevented any fund from selling the company may well be impaired at this point, leading to the first bona fide sell off in the name in the past 3 years.

It used to be primarily schools and banks. Oddly enough, bomb threats have now moved on to the world's most "beloved" company. Apple Insider reports: "A bomb threat at Apple's distribution center in Elk Grove, Calif., has forced an evacuation of three buildings while emergency personnel assess the potential threat. People with knowledge of Monday's ongoing incident informed AppleInsider that the eastern three buildings A, B and C have been evacuated at the Apple Sacramento Campus. The site is used for receiving, warehousing and logistics, and is comprised of three warehouses totaling 450,000 square feet." Unclear if there were any more suicides at FoxConn to accompany this curious development.

Judging from the relative volatility and the extremely wide holdings of this find company with a near cult like following, if price action breaks it will break very hard - and this time there may be fundamental justification for it.

It's about that time!

Yesterday at Apple Inc.’s (NASDAQ:AAPL) live press event in San Francisco, CEO Steve Jobs unveiled the much anticipated second version of the iPad (iPad 2), which will begin shipping March 11th. Despite Jobs’ recent health concerns (he is still on medical leave), the man behind the most innovative technology company in the world right now was determined to unveil the iPad 2 on his own, and looked relatively healthy while doing it according to several attendees, saying that “we’ve been working on this product for awhile, and I didn’t want to miss it.”
The iPad 2 is a very impressive gadget – much like its predecessor – and should push the company further ahead in the tablet race (Apple owns 90% of the tablet market share selling approximately 15 million devices in nine months during 2010), making it that much more difficult for competitors to catch up in the near term. Here are some highlights of the iPad 2:

The one company that will, without a shadow of a doubt, blow up the entire market should it finally reverse its trend of near exponential growth in recent months, and which has recently started indicating some (very) modest pricing weakness, is now held by more hedge funds than ever before. According to the just released Hedge Fund tracker from Goldman Sachs, Apple is now owned by 195 hedge funds, compared to 190 in Q3 as previously reported, and 181 before that. The world's biggest hedge fund hotel is filled to the brim. These fast money, marginal price determining buyers (and, yes, sellers) now hold 4% of the $332 billion equity cap. And with a solid 12% YTD return in the name, not to mention a negligible 1% short interest of market cap, the time to move on to greener pastures may be approaching. For now, all funds are docile and very well behaved participants in the game theory "don't sell" prisoner's dilemma. Yet with every dollar upside we are getting closer the first imminent defection. And a stock which can crash 10% on the merest hint of the passage of its founder, a stock which in turn accounts for 20% of the Nasdaq, and thus is a driver the ES and the global stock market, means that the continued meltup of the global stock market continues to rest on the shoulders of a sick man. That our regulators allow this is criminal and beyond reproach. But that's ok: it's all because of their prohibitively low budget. After all, how many bangbus subscriptions can $1 billion annual budget really buy?

As is by now well-known, Apple stock is underperforming after hours following reports of an allegedly sickly-looking Steve Jobs leaving the Stanford cancer center. The National Enquirer has released photos supposedly of an emaciated Jobs, yet one who is not readily identifiable as the Apple CEO. The National Enquirer, who initially reported the news today (to be published tomorrow), talked to critical-care physician Dr. Samuel Jacobson, who said, “Judging from the photos, he is close to terminal. I would say he has six weeks.” That said, given the reliability of The National Enquirer, waiting for further news before jumping to conclusions is advised. Furthermore, as TNW reports, "We’ve done a little digging into Dr. Samuel Jacobson. Jacobson appears to be a Florida based pulmonologist (breathing doctor) – not Oncologist. Which would naturally make you wonder just how qualified he is to diagnose someone via a photo, especially outside of his speciality." Obviously, a prudent question. While there is still no definitive confirmation either way, and Apple has not issued any statement, the stock has moved on the news, and we believe that this information should be shared as it is in the public doman and market moving.

Something odd is going on with the market today: the NASDAQ has, for reasons unknown, halted disseminations and while we are trying to figure out what the reason for this odd market moving event is, confirmed by major sustained negative ticlks, we are looking at the one stock that is more indicative of the Nasdaq (with a 20% weighting) than any other company: Apple. Judging by the chart, there are some very peculiar technicals in process. Just like Greek rioting prompted the flash crash, will today's Egyptian televised attempt at revolution force the Nasdaq to impose a market wide circuit breaker?

Update: Steve Jobs is not participating on the earnings call

While Apple's results were surely impressive, and we are waiting for the call Q&A for more details, we may have finally gotten to the proverbial sell the news event in the iconic company. After surging to a high of $357, the stock has since dropped almost back to the pre-halt levels, and at last check was trading at $344.66, granted to after hours volume. The action does beg the question, however: with 190 hedge funds in the name, who will be the marginal buyer especially since with Jobs now gone indefinitely the possibility of another beat's beat is seemingly getting increasingly problematic.

Apple posts revenues of $26.7 billion on EPS of $6.43. EPS consensus was for $5.38 per share, up from $3.67 per share a year ago, while revenue was expected to be up 55 percent at $24.3 billion. Whisper numbers were as high as $26.3 billion and EPS of $6.29. Apple's own guidance was for $23 billion in revenue and $4.80 in EPS.

• Q1 revenue USD 26.74bln vs. Exp. USD 24.42bln
  
• Q1 Macs sold 4.13mln, up 23%
  
• Q1 iPhone sold 16.24mln, up 86%
  
• Q1 gross margin 38.5% vs. Exp. 37.3%
  
• Q1 iPods sold 19.45mln, down 7%
  
• Q1 iPads sold 7.33mln
  
• Sees Q1 revenue about USD 22bln vs. Exp. 20.87bln, sees Earnings at $4.90
  

From a technical perspective, expect the stock to get clobbered by at least 8% in the first trading day after Jobs medical leave announcement, and could test $300 or below in the next few days. Looking ahead, there’s a good probability that Jobs may not come back...

AAPL Bid/Ask: EUR 233/249.85
Last EUR 239.5 down -20.7 (-7.96%)

And it was just yesterday that we ridiculed the Goldman brain trust for pushing everyone into the world's biggst hedge fund hotel, Apple, which is held by over 190 hedge funds. Don't look now but Nasdaq futures are about to get reacquainted with gravity.