Forecasting The Big Uh-Oh (4/29/04)
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Duck and cover, kids-- here comes the Big One! At least one pundit sees signs that AAPL will come crashing through the earth's crust any minute now. Oh, quit acting all surprised and stuff; you had to realize that Apple's recent luck with its stock price couldn't last forever, right? It's that whole "entropy" thing kicking in or something. Or maybe we're thinking of gravity.

Osmosis? Is it osmosis?

Anyway, whatever it is, we're pretty sure that Avocado's Number figures heavily. Regardless, before you go making a mad stabbing lunge for your favorite online trading house to dump all your AAPL like it was so much flaming radioactive panda poop with the Enron logo on it, you might consider the actual facts which have led BusinessWeek to cast aspersions at the stock's future performance. Apparently what's causing all the uproar is the fact that several higher-ups at Apple itself have been selling off a fairly hefty chunk of shares lately; publicly available government filings reveal that, just this month alone, "several top execs sold nearly 3 million shares worth at least $47.8 million." This has prompted analysts such as Kevin Conway of Thomson Financial to wonder "whether they know something we don't," and whether this is some sort of rats-deserting-sinking-ship scenario.

Personally, we think the whole semi-accusation smells of sensationalism for the sake of drama (and believe us when we tell you that we know a thing or two about that). For one thing, outgoing CFO Fred Anderson's stock sales accounted for 23% of that allegedly worrisome $47.8 million. And sure, normally when the guy who handles the money starts dumping large volumes of his own company's stock, that can be a pretty bad sign, but let's not forget that the guy's retiring, for crying out Pete's sake; is it so strange that he might want to cash in a few of his chips for yacht money, or an extensive new wardrobe of Bermuda shorts, or maybe several million Twinkies to deep fry? Seriously, let the guy retire in style, right?

For another thing, the SEC can get pretty nasty with insider traders, and since all these stock transactions are a matter of public record, those Apple execs would have to be about thirty more kinds of stupid than we thought possible to try to profit off any knowledge they might have about upcoming bad news. We have a tough time believing that bigwigs running any company capable of producing insanely great stuff like Exposé and the miniPod Click Wheel could somehow figure that no one would notice if they sold a bunch of shares a month or two prior to some upcoming revelation that'll line Wall Street with the corpses of panicked jumpers.

Then again, if you're the paranoid type, there is maybe a little bit of a precedent, here; BusinessWeek mentions that the last time Apple insiders sold off so much stock, AAPL's price cratered shortly thereafter. However, what BusinessWeek fails to mention is that Apple got sued by stockholders for insider trading when a similar sort of thing happened back in 2000, and indeed, the Associated Press noticed a potentially disturbing correlation between executive Apple stock sales and subsequent corporate earnings warnings that nuked AAPL's price soon after.

Make of it what you will; personally, we doubt there's anything more going on here than sheer coincidence, and if we won't milk a potentially juicy tale of stock intrigue for all the drama it's worth, well, that says something.

Oh, mitosis! We were thinking of mitosis, right? No? Dang.

 
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The above scene was taken from the 4/29/04 episode:

April 29, 2004: Some analysts see recent heavy stock sales by Apple execs as a hint of doom to come. Meanwhile, rumors claim that the next major iPod revision just finished shooting its small-screen debut, and it seems that Apple's latest iPod software updater is being naughty. A bit. On rare occasions...

Other scenes from that episode:

  • 4663: Ending The Generation Gap (4/29/04)   Say, we were just scoping out a calendar trying to find out when "Sneak Some Zucchini onto Your Neighbors' Porch Day" happens to fall this year, when we suddenly realized something: aren't we about due for another big iPod revision?...

  • 4664: Bummer; Everything's Fine (4/29/04)   Hey, speaking of iPods, if you've been trying to puzzle through some weirdness with iPod Update 2004-04-28, you're not alone. Personally, we haven't gotten around to installing it yet, even though it claims that our ancient 5 GB models will enjoy "improved playback performance" (like, what-- our songs will play faster?) and "compatibility with iTunes 4.5 and the iTunes Music Store."...

Or view the entire episode as originally broadcast...

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