No one is buying Apple

by,

Suzanne Coleman

Thestreet.com reported today that Apple is in talks to bring Apple Pay to China, and part of their strategy is to work with Alibaba, China’s massive online store, similar to our Amazon.  But the stock hasn’t gone up in response to this news, why not?

Maybe it’s because everyone already thought this would happen.  That makes sense, since Apple is currently focused on expanding access for the Chinese to its products and services by opening many more stores in China.

It has been previously reported that Apple makes $0.10-0.15 PER Apple Pay transaction, that is a BIG deal.  With about 62 million current iPhone users in China*, this is a big future contributor to Apple’s bottom line.  If you guesstimated 30% of those iPhone owners used Apple Pay once every 2 days, you would end up with over $531,000 a day in revenue from Apple Pay in China alone.  And Apple is increasing the number of users there as we speak.  So, basically, it’s a big deal.  I have predicted that Apple will make major moves in the finance sector here:  [https://sliceiconic.com/2015/03/16/apples-future-domination-apple-watch-applebank-and-appleplay/].  We’ll see what happens.

Maybe Apple stock has been doing so poorly, relative to its actual performance as a BUSINESS, is because everyone/every institution who wants to own the stock, already does.  That would make sense.  Its price rises before earnings due to short-term buyers hoping to cash in on a quick up and down movement, and then it drops back down to almost where it was before earnings were reported.  I’ve written on this odd behavior of investors before, here: [https://sliceiconic.com/2015/01/27/reasonability/], where I discuss the reasonableness of PE ratios and investor behaviors.

What more is there to say?  Maybe the stock price hasn’t moved significantly because everybody is waiting to hear the numbers from the Apple Watch sales?  I don’t think that’s the case since most professionals have read the analysis which suggests that even if Watches are selling as expected, those sales won’t contribute significantly to the bottom line, for now.

I currently see Apple as “the new IBM.”  It’s become the “old stalwart” of the tech boom industry.  I guess 33-40% increases in profit year-over-year is a bit stale and dusty?  Right?

Anyone?

Bueller?

Its stock price barely moves in response to stellar quarterly reports on its performance, odd.  Am I the only one who thinks this way?  Oh, no, wait, I’m not.  There is that famous guy, what’s his name?  Carl Icahn.  Yeah… maybe we’ve both got it wrong.  🙂

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NOTE:  This writer owns shares of Apple stock though she’s not really sure why anymore…

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*Based on estimates of 520 million smartphone users and a 12% market share as reported by cnet.com here:  http://www.cnet.com/news/china-likely-to-top-us-for-apple-iphone-sales/

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