Crazy people on the street yelling about their crackpot theories usually don’t.
Apple’s stock price (AAPL) is going to collapse, and Amazon (AMZN) may in fact go bankrupt.
Wow! That’s… just…
Karl starts with Amazon, which he thinks is headed for DOOOOM because he expects the U.S. government will close the tax loophole that’s meant the online retailer hasn’t had to charge sales tax in most states all these years.
In short, this is a firm that only exists because of its ability to evade that tax structure. When, not if, that ends, the company is a literal zero.
Say, is there an adult there the Macalope can talk to?
OK, the Macalope doesn’t want to spend a lot of time on Karl’s cuckoo theories on Amazon because we need to get to his cuckoo theories about Apple. But, suffice it to say his assumptions that Amazon has no leverage here, and that its prices would go up 6 percent across the board, are, in fact, cuckoo.
Now on to Apple. There was a report out Monday that the firm had cut supplier deliveries by 25% out of Asia. There was a mad analyst scramble during the day to try to refute the damage that was rapidly accumulating in the stock, which was mostly successful. In my view, this was a fool’s errand and you were a nut if you followed people into the stock on that “dip.”
Karl discounts the
multitude of counter-arguments, including that the report was based entirely on incomplete information about parts orders in Asia, and didn’t take into account the fact that Apple will now be getting some parts from Brazil.
What does Karl think the reason for this slowdown is? The Kindle Fire? Nope: The bad economy in Europe and the TouchPad fire sale.
HP’s “blowout” put the $99 price point in the mind of consumers and that is not going to go away.
How many consumers do you think have even heard of the HP TouchPad?
The Macalope doesn’t disagree that the economy in Europe and lower-priced tablets (primarily the Kindle Fire, though) will affect Apple’s sales, but Denninger has fantasized them into Apple-killing machines. Is he aware the company makes other products?
The problem with these sorts of firms is that when you’re running on afterburners it’s nearly impossible to pull back without losing control and crashing, simply because you’ve built a culture and corporate environment that is filled with “true believers” operating at a corporate level where everything has gone right—and thus you all believe it will continue to.
So, if that’s true, why isn’t Apple still churning out the same number of iPods it always did, despite the fact that sales are declining?
Sorry. Sorry. Logic. You were about to stick a fish in your pants, flap your arms and sing “Ave Maria.” Please. Bring us to your nutso conclusion.
So here’s the predictions: Apple trades under $100 at the trough and Amazon may well be a flat-out zero.
Yeah, I know those are both audacious calls…
Those aren’t audacious, Karl. They’re bananas. Cigarette-smoking-chimp-in-a-tutu bananas.
See, here’s the thing, Karl. If these effects you’re talking about are going to be as bad as you think, then they’re going to affect more companies than just start with the letter “A.” You haven’t presented anything that’s uniquely wrong with Apple’s business that should warrant a 75-percent drop in its share price.
This isn’t unusual. Karl has
a rap sheet of saying bass-ackwards things about Apple. You weren’t right then, Karl. Why do you think anyone would think you’re right now?
(Disclosure: the Macalope holds an insignificant number of Apple shares.)
[Editors’ Note: In addition to being a mythical beast, the
Macalope is not an employee of Macworld. As a result, the Macalope is always free to criticize any media organization. Even ours.]