A cry for Apple to confront the ‘click-bait hungry media’

Excerpts from an open letter to Tim Cook.

This landed in my Twitter feed Friday:

Dear Mr. Cook:

After declining 5% in 2015, shares of Apple are down 6% year-to-date, 34% from their peak, and 23% in the last 12 months, while S&P 500 and majority of leading technology stock are at or near their all- time highs. This is the second time in four years that, in just a few months, Apple’s stock has experienced 40% declines from its peak, an incredibly rare and unusual behavior for a company of this size and significance…

We continue to have deep admiration for Apple as a company, its employees and leadership, and believe there is more that can be done, should be done, and needs to be done, to deal with the very persistent, disturbing and disruptive volatility in Apple shares, particularly unbecoming of a company with $500+ billion in market capitalization…

Unlike most naysayers and pundits, we do not believe Apple is on its way to become the next Research In Motion or Nokia, or have a ‘lost’ decade like Microsoft. As of now, the narrative around Apple has been built by a loud, boisterous, sensationalist and click-bait hungry media which every day put out more negative stories about iPhone, iPad, Apple Watch and ‘everything Apple’ than we have ever seen done to any company…

These questions cannot be answered by ‘let’s try to make the best products for our customers’ and all will be fine…

As we have mentioned in our previous letters, we do not believe a company’s CEO, board of directors, or management team, should engage in systematic activities to influence its stock price. However, we strongly believe that it is their fiduciary responsibility to build, disseminate, and continuously reiterate a narrative that is in line with the future vision and potentials of the company, one that we believe has a direct impact on markets, as well as investors’ perception and view of the company…

Is anyone at Apple listening to the sounds of the market or does anyone in Cupertino even care?

Sincerely,
Ken Kiarash
Senior Equity Analyst
Simian Research

There’s more where that came from. Full text here.

16 Comments

  1. David Emery said:

    But a reasonable argument can be made that Apple is acting in the best fiduciary interests of its shareholders by -buying up stock- when it believes Apple is seriously under-valued.

    I think the problem with Mr Kiarash’s narrative is an invalid assumption, that both the stock market and more importantly the analysts, bloggers, media, etc, are acting “rationally” with respect to Apple’s stock value. How many clicks would an article get that says, “Tim Cook is running Apple well, stock buybacks build shareholder value, Apple’s R&D and its policy of announcing products only when they’re actually ready to ship” ??

    Conversely, where are the ‘penalties’ for saying outright false stuff about Apple? Should the SEC conduct an investigation of, for example, Doug Kass? Should it look at short buying patterns in AAPL and say, “these do not look ‘reasonable’?”

    At the end of the day, I’m OK with Tim Cook ignoring the blogosphere and concentrating on running Apple efficiently. That being said, part of that ‘efficiency’ should be an increased emphasis on Software Quality Assurance. Bugs and inconsistencies in Apple products bother me much more than investor perception. (Claimer, I own AAPL stock.)

    6
    June 11, 2016
    • Richard Wanderman said:

      Amen. Especially the last sentence.

      0
      June 11, 2016
  2. John Blackburn said:

    It is through actions taken that a CEO must show fiduciary responsibility to shareholders, not through words about current strategy and tactics. Apple’s sole concern for the market should be their continued ability to attract and retain talent with stock options.

    1
    June 11, 2016
    • Tom Sidla said:

      So, a poorly performing stock price has a big impact on employee retention and hiring. Is it really THAT important? (Honest question.) When it comes to Silicon Valley are the usual metrics thrown out? Pay scale, benefits, vacation, etc.

      If that’s the case, who the hell is still working at Yahoo!?

      0
      June 11, 2016
      • John Blackburn said:

        It’s not that stock price doesn’t impact a company’s ability to perform, but that attempts to control the stock price short-term are misguided and likely injurious. Long-term, a company drives stock price by making great products and pleasing customers, which is already Apple’s professed goal—and one they’re clearly executing on—so open letters like this are really statements of petulant impatience.

        2
        June 11, 2016
  3. Tom Sidla said:

    Awe! What an adorable open letter! Simian Research is apparently new to Apple stock holding.

    By enabling content blockers, Apple has de-incentivized click-baiting. Content blockers are growing in popularity, especially outside of the US.

    BTW, Apple is not alone in this. The news flow around Tesla is often BS and sometimes outright fabrication. Consumer Reports gives the Model S the highest score ever, but a quality car is not news that sells.

    Try to imagine the news flow around the Apple Car after it launches.

    0
    June 11, 2016

Leave a Reply