Apple stock stays up despite false rumors

Apple stock retains yesterday's gains, even though Steve Jobs has rejected the post of chairman of the board.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Apple Computer's (AAPL) stock is trading high today, even after Steve Jobs rejected the post of chairman of Apple's board.

The stock is trading at 17-7/16, up from 17-3/8 at yesterday's close. Macworld saga continues The stock rose more than 5 percent in trading yesterday on speculation that Jobs might accept the post and would take over departed CEO Gilbert Amelio's spot as the keynote speaker at next week's Macworld.

The stock is now back where it closed July 17, a day after announcing a smaller-than-expected third-quarter loss. It ended that day at 17-1/2, up 1-1/16, or 6.4 percent, with a whopping 6.7 million shares changing hands.

Apple posted a loss of $56 million on revenues of $1.7 billion. High-end Wall Street estimates called for a loss of upwards of $126 million.

The stock's recent performance rivals the rise Apple received prior to its earnings announcement, when speculation hit the streets that Apple was a buyout target.

On July 11, Apple's shares soared 14.6 percent to close at 15-3/16, up 1-15/16 on 6.4 million shares trading.

Investors apparently thought the buyout route was the best solution for Apple's financial woes. But company officials, chief financial officer Fred Anderson among them, have repeatedly said that Apple is not interested in finding a buyer.

Wall Street also reacted favorably to a proposal Larry Ellison, chairman and chief executive of Oracle (ORCL), floated out in March. Ellison said he was thinking of rounding up an investor group to buy Apple in a $2.1 billion cash-and-stock deal.

Shares of Apple soared as much as 15 percent on March 27, when Ellison outlined his plans in a San Jose Mercury article. The stock closed that day at 18-5/8, up 1-7/8. Ellison, however, has since scrapped such plans.

Meanwhile, Apple has said it will not reach sustained profitability in the fourth quarter, as ousted chief executive Gilbert Amelio had earlier predicted. CFO Anderson made that clear when the company announced its third-quarter results.

Nonetheless, Anderson said at the time of the earnings announcement that Apple had shipped 698,000 units in the quarter, up 16 percent from the previous quarter. He noted that this increase was largely driven by the education market and a 60 percent increase in sales to Japan.

Entry-level products, which were sold into the education and consumer markets, represented 50 percent of sales and grew by 27 percent in the quarter, Anderson said.

Meanwhile, the high-end Power Macintosh line accounted for about 36 percent of sales and grew by 32 percent from the previous quarter.

But PowerBook sales were weak in the quarter, falling by 29 percent over the previous period and representing 13 percent of sales in the quarter. Anderson cited an easing of demand for the high-end 3400 PowerBook series, which was introduced last quarter, and general softness in the entry-level PowerBook space.

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