A Goldman Sachs analyst called for a 25% decline in Apple’s stock because of some wonky accounting related to Apple+. | Credit: AFP
Goldman Sachs generally has the best analysts in a world where analysts are regarded as overpaid contemporary versions of Nostradamus. Yet sometimes even Goldman climbs aboard the crazy train and makes predictions that would have Nostradamus himself scratching his head.
None of This Makes Any Sense
See if you can follow this logic because I don’t think anybody can.
Rod Hall believes – he has no evidence but he believes – that the Apple+ one-year trial will not be classified as hardware but as services. As a result, services division’s revenue numbers will look extra healthy while hardware will be penalized.
This, Rod Hall says, will have a material negative effect on earnings and consequently, the stock will fall.
And Bill Belichick holds blood rituals during the Super Bowl halftime show.
Here’s a Nutty Example
Here’s a specific example of what Rod Hall believes is going to happen. Let’s say a consumer buys an iPhone for a thousand dollars. The consumer also gets a free year of Apple+ that has a value of $60.
Apple considers you to have purchased a bundle with a total value of $1,060.
Here’s where the conspiracy theory begins. Rod Hall believes that the $60 discount for Apple+ that is built into that bundle does not go entirely to Apple+ revenue. Rod Hall believes that Apple will divide that discount proportionally.