Here’s A Quick Note On Apple, David Tepper, Facebook And PG&E, Just Because

Ok, so there was good news and bad news for beleaguered shares of Apple after the bell.

In keeping with recent precedent, let’s start with the bad news. AMS AG became the fourth supplier this week to slash guidance. The company – which makes ambient light sensors for iPhones – said it’s looking for revenues of $480 million to $520 million in Q4, down markedly from previous projections of $570 million to $610 million. 

The excuse is the same as that offered by Lumentum, whose own negative preannouncement tanked Apple earlier this week. In a refrain that’s becoming all too familiar, AMS cited “recent demand changes from a major consumer customer.”

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Apple shares are in all kinds of trouble, having fallen for five days in a row, the worst string of losses since April. It’s now through the 200-DMA.

Long story short, it’s in a bear market.

So that’s the bad news. On Monday, Goldman cut its iPhone estimates and its price target for Apple following the Lumentum debacle. “We are reducing our FQ1’19 iPhone units estimate by 5% and FQ1 total revenue by 3% to $89bn”, the bank wrote, adding that their “FQ1 revenue estimate is now at the low end of Apple’s guidance given on Nov 1 ($89bn-$93bn) [and] while Apple may have already contemplated some weakness in its guidance, we feel the timing and magnitude of the LITE reduction suggests Apple is seeing incrementally worse demand data.”

The good news after the bell was that David Tepper is back in the stock. Appaloosa looks like it added 100k shares in Q3 according to its 13-F (filed today, along with everybody else’s).

This is in keeping with Tepper’s previous flip flops on Apple. Back in Q1, he unloaded his entire stake in the company (worth some $776 million at the time), and used the cash to buy the Panthers. Warren Buffett was buying back then and he’s still buying now. Berkshire boosted its stake in Apple in Q3.

Unfortunately for FAANG acolytes, it looks like David slashed his Facebook and BABA holdings, not exactly a vote of confidence for two of the other names that comprise the world’s most crowded trade.

(BofAML)

Don’t forget that Dan Loeb recently exited Facebook entirely while slashing his position in Netflix by a third.

Oh, and Tepper also loaded up on some (more) PG&E which this week tapped out its revolvers and looks like it might go bankrupt after accidentally turning California into a smoldering pile of ash.