Silly Analysts

Back when I worked at EDS, there was a short period of time when we were given stock options, and so I actually paid attention to our company’s stock price. [I ended up leaving – and losing my options – just before they hired a new CEO, which launched the stock price to the point where I could have sold them and made some money. Dammit.] It was the craziest thing. The company would meet its goals, and say it was on track for the rest of the year, but the Wall Street analysts would have projected things differently, and so the stock would fall even though we were doing everything we said we would.
In the past month or so, there’s been a lot of speculation about what new products Apple will be introducing at MacWorld in January. Kevin Rose of Digg blurted that it would be the oft-rumored, never delivered “iPhone” and that it would be “as small as shit.” No offense Kevin, but my poop is bigger than a lot of phones out there. Then I read this fine article by Peter Cohen, which I will quote from, because you can’t make this stuff up.

Incredibly, even though Apple hasn’t said a word to anyone about whether an iPhone is in the works, rumors of the iPhone are having a tangible effect on the company’s stock price. Why? Because Wall Street financial analysts have been talking about the iPhone like it’s a matter of fact. One even went so far as to speculate that Apple won’t be able to ship it when he first expected it to. As a result, Apple’s stock price fell last Thursday.
So Apple’s stock price fell because an analyst said the company would miss its target ship date on a product it hasn’t even confirmed to exist, much less specified a release schedule for.

Amazing, isn’t it? And now today, I read (on the appropriately named Red Herring) that an analyst is speculating – again, based on no factual information, but simply on Apple’s hiring of game developers – that Apple is going to try to enter the gaming console wars and take on Sony, Microsoft and Nintendo. Forget the fact that this would be a completely moronic move, since each of the aforementioned companies already has their consoles on the market today, so very few gamers would be in the market for yet another new console. Forget the fact that Apple tried this once before, with the Pippin, and failed miserably, for the exact reason I just stated: they were late to market. How about the basis for the report? Apple is hiring game developers. So? How many console makers do you know that don’t have other companies making games for their console? If Apple was coming out with a console, they’d have to have big companies like EA on board, and no one has reported any such thing. They’d also most likely have to sell the console at a loss (like all the other companies do), hoping and praying that they could make money off game sales and possibly movie downloads. Not very likely. And yet this moron analyst is probably causing Apple’s stock to move based on his moronic “analysis.” Capitalism at its finest.
Update: There’s more. Today a UBS analyst says that not only will Apple come out with a phone they haven’t admitted to, they will also create a MVNO (in essence, become their own cell provider) to sell it. Which heavyweight ESPN tried to do, and failed miserably. My head a-splode.