'Mad Money' report helps boost Apple stock price
updated 03:10 pm EDT, Wed September 16, 2009
Tied to change in accounting rules
Apple stock prices have risen sharply within the last 24 hours, a shift attributed to a Tuesday episode of the CNBC TV show Mad Money. Shares climbed 1.6 percent between Tuesday close and Wednesday morning, leaving Apple's stock price at $178. By 12:25PM on Wednesday shares were priced at $182.72, Apple's best opening since August 2008, a month before the onset of a global economic recession. As of approximately 3:12PM on Wednesday, shares had settled down to $182.16.
During the Tuesday show, host Jim Cramer raised his price target for Apple stock from $200 to $264. The decision was based on a change in accounting rules, which should allow Apple to forgo subscription accounting on the iPhone, revealing the company's real revenue. The Street's 2011 earnings estimates will likely jump from $8 to $12 per share, says Cramer.
The host further suggests that while many money managers have incorporated non-GAAP revenue into their analyses, they are often too narrowly focused on price-to-earnings ratios. As a consequence, he proposes, they are going to be surprised when the new rules take effect. Revisions are currently in draft form and waiting for FASB approval.
jim cramer
09/16, 03:26pm reply
is a moron.
EternalGuest
Fresh-Faced Recruit
Joined: Mar 2009
he loves to manipulate
09/16, 03:29pm reply
AAPL, remember that clip on The Daily Show?
climacs
Fresh-Faced Recruit
Joined: Sep 2001
ditto
09/16, 04:41pm reply
A good post is worth repeating! Climacs is bang on target. I trust Jon Stewart more than I trust Jim Cramer!
Feathers
Forum Regular
Joined: Oct 1999
Cramer has far too much power
09/17, 07:07am reply
Days of articles about the accounting change had gone by and had barely moved Apple stock. All it took was a few minutes of Cramer's blathering to cause Apple's stock to jump and it still hasn't been proven that the accounting change will make that much of a difference since the value of Apple hasn't changed but only the way the revenue is reported.
It's really worth while to pay certain shills to start talking your company up. Cramer must reach very gullible sorts of investors that hang onto his every word. Sure, I'm happy Apple stock has temporarily gone up, but if he were to come back next week and say he was dumping Apple, people would start selling off just based on his word. People like Cramer are not to be trusted.
I'm still looking forward to seeing Apple get past $200 by the end of the year based on very strong iPhone sales and hopefully improved iPod sales thanks to the new Nano.
Constable Odo
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Joined: Aug 2007
market prices != rational
09/17, 11:38am reply
there is a prominent theory of economics (the neoclassical school) which claims that market prices are always rational. This is a prime example of why that is bullshit. Markets would be rational if the players had perfect information and were completely logical, which means they would always make rational, logical decisions in valuing stocks and the income/assets which underlie their value (as well as economic conditions and so on).
But, that is not how the real world works. Some market players have the best information and are in the best position to make rational choices about values. Most of the rest of us have imperfect information and are often easily herded by douchenozzles like Cramer and other shysters. Market players TRY to act rationally, and more often than not they approach that platonic ideal. But often enough, market players act according to fear and greed which is enough to distort market prices, sometimes to a great degree.
climacs
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Joined: Sep 2001