Apple Inc. (AAPL) Post-Earnings Sell-off “A Premeditated Dump”?

Updated on

While explaining Apple Inc. (NASDAQ:AAPL) stock performance after the company declared its results last week, experts hinted at  “disappointed” investors, however, evidence suggests otherwise, according  to “a premeditated flash dump” enabled by high frequency trading algorithms.

A blog post by trading insider, ‘Tyler Durden, noted Nanex charts (one shown below) indicating trades of 800,000 Apple Inc. (NASDAQ:AAPL) shares worth almost $300 million executed in 17 second intervals.

Apple Inc. (AAPL) Post-Earnings Sell-off “A Premeditated Dump”?

“In this case,” the trader noted, “it looks like a very premeditated unloading” of Apple stock “in the last second, with the full knowledge it would shake the market. Why anyone would want (or wait until the very last second) to do that, while covering the offsetting ES short in the pair trade, to ramp the market into the close, is anyone’s guess.”

A number of analysts and experts came up with their own explanation for Apple’s decline, with most them suggesting the iPhone maker has no further growth prospects, which is reflected in the company’s flat quarterly earnings when compared to last year’s report card.

For the fourth quarter, both during and after last year’s earnings, including an extra, 14th week, which Apple Inc. (NASDAQ:AAPL) executives have been telling repeatedly. This curious case of an extra week occurs every five or six years. This according to analysts could also be a reason for flat earnings.

“On a weekly basis,” Robert Paul Leitao wrote, “Apple’s revenue was $4.2 billion in the recent December quarter versus $3.3 billion in the prior-year period. On an equal week basis, revenue in the quarter rose 26.7%.”

Analyzing the company’s balance sheet, Leitao noted that the iPhone maker has a massive $132 billion cash pile, along with a $2.5 billion for distribution to shareholders and $2 billion for the stock buyback plan.  Apart from these visible items, Leitao also pointed to the deferred revenues, which most of investors fail to detect. Apple has been deferring revenues from Mac and iOS devices sold to use the proceeds in providing free software updates over the course of those products.

At the end of 2012, “Apple’s deferred revenue balance totaled $7.274 billion,” Leitao noted. “Most of this deferred revenue balance will be recognized as net sales over the next eight fiscal quarters.”

For the December quarter, Apple Inc. (NASDAQ:AAPL) also declared the US tax expenses on its cash holdings in advance. On such holding, the company need not pay any taxes until it plans to transfer those earnings into the US. For the quarter, Apple had $1.179 billion in deferred income tax expense, which totals to $14.712 billion “preallocated, but not actually paid.”

Leave a Comment