Mar 202014
 

I made a link reference to Trip Chowdhry as “the worst Apple analyst on the planet” after his appearance on CNBC. The venerable Philip Elmer-DeWitt has taken a couple of shots at his particular brand of analysis, including my personal favorite “How wrong-headed can one Apple analyst be?” Apparently, Chowdhry took the title of that piece as some sort of challenge, because his latest note to investors is a tour de force of anti-analysis. It’s captivating in a “The Counselor” kind of way, except people expected that movie to be good, whereas anyone who has ever seen this muppet in action knew he had it in him.
They see me trollin' They hatin'

They see me trollin’
They hatin’

Chowdhry’s opus vomitus takes the form of a report filed March 8 calling for, among other things, Tim Cook’s firing. Rocco Pendola must feel vindicated. You can download the full report here to bear witness yourself (link provided due to the utter absurdity of its contents), but I’d be remiss if I didn’t take some shots at Trip’s latest tirade.

RESEARCH: Every month we attend 8 to 11 Technology conferences, Summits and User Group Meetings,

One month, we attended 12, but to be conservative we eliminated the outlier and stuck with 8 – 11

and speak to no less than 300 people.

Because 300 is the minimum number of people from which to extract credible opinions. And Global Equities Research is nothing if not credible.

Here is the converged view on Apple

KEY MESSAGE:

  • Apple Shareholders, Apple Employees and the Developer Community at-large have lost confidence is Apple’s current leadership
  • Apple’s CEO Tim Cook is being incentivized to operate in a comfort zone of complacency until August 2016
  • To prevent further destruction of shareholder value, Apple’s CEO and CFO need to be replaced sooner rather than later
  • The team of Jon Rubenstein (Father of iPod) as CEO and Fred Anderson as CFO, may be best to revive Apple
Trip Chowdhry knows kung fu - which he just used to kick common sense in the balls.

Trip Chowdhry knows kung fu – which he uses to periodically kick common sense in the balls.

People, people, PEOPLE! Let’s give Chowdhry the opportunity to explain his thinking…but more likely bury himself with his own words. But possibly explain his thinking!

DETAILS:

Apple shareholders have lost confidence in Apple’s CEO and CFO – Destruction of $130 Bil of Apple’s Shareholder value is more than 2x the destruction of Shareholder value at Enron.

Note the date range in the upper left-hand corner

Note the date range in the upper left-hand corner

  • Apple’s Stock is at $530, which is 23% below its high of $702, while S&P 500 is up 27% and Nasdaq is up 36%, in the same time period.
  • Apple’s employees and investors are not oblivious to the fact that, while other stocks and broad indexes have created large amounts of shareholder wealth in the last 12 months, Tim Cook and Peter Oppenheimer have systematically erased $130 Bil of shareholder value.
  • When $63 Bil of shareholder wealth was destroyed at Enron, it shook everyone’s confidence…

When…how…what the FUCK happened WHERE?! Did someone pretending to offer advice on Apple in exchange for money actually compare it to Enron? That has to be the analytical equivalent of Godwinning a comment thread.

…Apple’s destruction of shareholder value is much larger and has occurred in just over 12 months

This is something pointed out by the infinitely more polite J. M. Manness, but bears more explicit treatment just to illustrate the staggering level of stupid we’re dealing with here. That date range I pointed out in the chart caption is 17 months, which I guess qualifies as “just over” in Jackassia.

You’ll notice, as Manness did, that Apple actually rose 20% over the last year.

Screeny Shot Mar 19, 2014, 10.19.01 PM

Chowdhry can’t even be bothered to consult a calendar when cherry-picking.

  • Tim Cook’s and Peter Oppenheimer’s “returning cash to the shareholders” has only resulted in a 23% decline in shareholder value, outflow of cash from the Balance Sheet and an inflow of debt. It is not clear where all the cash is going.

If you have any kind of allergy to disassociated, nonsensical logic, I hope you brought your epi pen. The 23% AAPL is down – in market cap, mind you, can now be attributed to one cause: the company’s buybacks. And it’s pretty clear where the cash is going if you can be bothered to read a financial statement.

Possible Explanation:

  • Tim Cook’s compensation and incentives are for NOT maximizing the value of Apple stock until August 2016.
  • Tim Cook’s compensation package prior to June 2013 enabled vesting of 500,000 shares in August 2016. This incentive was consistent…

I’m going to spare my readers the chart, graph and seven bullet points that follow. It’s a shame too because it looks like a decent amount of research went into making Chowdhry’s point. It’s too bad that the presmise, which is that Tim Cook is not running Apple aggressively because he wants to wait until his stock options mature before he releases any new product categories, is complete garbage.

Think about that assumption for a second: the CEO of the most valuable company in the world is actively stalling its product pipeline for the express purpose of maximizing his personal wealth. And he intends to do it for over 3 years. Thank God Trip Chowdhry is here to save Apple investors from standing behind the man that has increased the company’s market cap by 36% since he became CEO.

Apple developer community –at-large has lost confidence in Apple CEO – No new Products and Zero Innovation

  • Apple’s developer community continues to be frustrated by Apple’s CEO. “Under Tim Cook, Apple has not launched a single new product…where is the iWatch, where is the AppleTV”

Where are some of the other product categories that analysts have been whacking it to? Where are the products that Apple never mentioned were in development, but really, really should make because analysts know more about running the company than Apple does? The ones that have been nothing but unmitigated failures to this point when brought to market by Apple’s competitors?! And I’m really not sure who is being quoted above – maybe one of the voices in Chowdhry’s head.

  • Apple developer community members have started to put more of their effort on Google Android Platform, as they are seeing rapid innovation on Google platform vs. Apple.

For developers, apparently “rate of innovation” is a substitute for “actual money” when it comes to sustaining a business because despite Google’s super duper pace of innovation, iOS developers still make 5 times what Android developers do. I guess that’s why so many of them are developing for Android first, just like Eric Schmidt said they would.

  • Some Apple developer community members have left iOS platform for writing applications for the Pivotal Big Data Platform

“Some” (where n is between “one” and “all of them”) have left iOS for this Pivotal Big Data Platform…company? Religious movement? Is PBDP our new Data Overlord? Is it the Borg? Your guess is as good as mine. I wonder if this is what Charlie felt like at the end of “Flowers for Algernon“.

  • Apple developer community sees zero innovation under Tim Cook, and the majority would like to see him replaced.

INT. DAY – A LARGE HOTEL CONFERENCE ROOM

The entire Apple developer community has assembled. Assorted awkward laughs and snippets of app store submission horror stories can be heard in the crowd.

NECKBEARD 1: I call this meeting to order! First item of business: the replacement of Apple CEO Tim Cook. All in favor?

A stunned silence falls over the crowd, punctuated by the occasional throat-clearing. Finally, an interpid developer raises his hand.

NECKBEARD 1 Yes?

NECKBEARD 2: What. In the fucking hell. Are you talking about?

THE CROWD BURSTS INTO UPROARIOUS LAUGHTER AS VARIOUS ITEMS OF PRODUCE ARE LAUNCHED TOWARD THE PODIUM

Apple’s CEO Tim Cook and CFO Peter Oppenheimer are out of Touch – QUALCOMM has stolen the Proximity Commerce market from Apple … and Apple’s CEO and CFO have not even realized it.

  • With the launch of Apple iOS7, Apple brought a very compelling new technology iBeacon to market, which had the potential to propel Apple into leadership position in mega-billion $$ Proximity Commerce market
  • However, Qualcomm also saw the opportunity in Proximity Commerce and seized the opportunity by creating its own proximity commerce platform called Gimbal
  • Qualcomm has recruited a developer community of more than 10,000 developers who would create Gimbal based Proximity commerce
  • Qualcomm also went into full scale production of Gimbal Beacons priced from being Free to $20 depending on the type of Application
  • Qualcomm, by being fast is well poised to own this multi-billion Proximity Commerce market and has beaten Apple in its own game, as Apple has been complacent

What a steaming pile of fuck-all that was. Where to even begin?

First of all, I don’t see anything that says that Qualcomm’s efforts and Apple’s are mutually exclusive. In fact, Qualcomm is the company that made the iBeacons for the MLB.com At The Ballpark events on baseball’s opening day. Does Trip actually think Apple is the company making iBeacons? This point may be lost on Trip (it is), but the people who own iPhones already have the user end of iBeacon technology. That’s hundreds of millions of devices already in the wild.

  • “Qualcomm, with its Gimbal platform is eating Apple’s Lunch…What is Tim Cook gonna do” asked a frustrated Developer

It’s a bullet point, it’s a quote: it’s a quoting point. A quote that makes no sense given that Qualcomm has bought into iBeacons. And it’s from one developer. Out of a population of about tens of thousands. The classic “according to my friend Larry, ergo, the broad consensus is…” trope. And of course this developer is anonymous, because there was absolutely no other way for the bullet point to mean less. 

Jon Rubenstein (sic) (Father of iPod) as the new CEO and Fred Anderson as the new CFO can rescue Apple

  • Apple needs a new CEO who has created new products and can bring innovation back at Apple
  • Apple needs a new CFO who can increase shareholder value by fundamental innovation and not by gimmickry
  • We think Jon Rubenstein, the Father of iPod as CEO, and Fred Anderson, the prior Apple CFO, would be best to turnaround the destruction of shareholder value at Apple.

Now I love me some Jon Rubinstein. In addition to being the “father of the iPod”, he was this close to succeeding with now-defunct Palm Pre, perhaps the most thoughtful iPhone competitor to date. But the reason one should consider someone not even running a company in the Valley over, let’s say – sigh – Elon Musk is…

I know you didn’t expect to see any justification. I was just testing you.

And Fred Anderson – why, WHY? Please Trip, tell us why, aside from the fact that he served under Steve Jobs for the entirety of his tenure, should Fred Anderson return as CFO? Someone who hasn’t been at Apple for 10 years and has not one fucking clue what the company is like today?

Yes, I should just stop testing you now.

Pls Ask Q’s – 650-[REDACTED]

Trust me on this one, Trip.

After choking down hundreds of articles panning Apple, I’ve come to a realization: there is an art to good Apple trolling. Back in the day, I despised Madonna as a musician yet respected her popularity, which was undeniable. Successful Apple trolls lay out just enough bait to inspire rage-clicks, but restrain their bias just enough to maintain some air of credibility.

Trip Chowdhry, however, is not an artist. He takes the basic trolling model and does things to it that are illegal in at least 23 states under some permutation of anti-bestiality law. It’s actually a little stunning how someone so logically disconnected and willfully ignorant can receive any recognition whatsoever for his vowel-and-consonant pustules. The crazy guy outside of Penn Station who wears a sandwich board calling out the FBI as paid killers for big Pharma makes more fucking sense than Chowdhry – on a good day. For a nanosecond, I considered inducting him into the hallowed halls of Douchebag’s Row, but his presence would make a farce out of a collection of people with the faculties to be trolls. Chowdhry can’t even muster that level of competence.

This is what the tech news ecosystem has become. Once upon a time, you could get your name in the tech press by slamming Apple just enough to make people question their understanding of the company. Nowadays, between the Yukari Iwatani Kane wankfest and tripe like Trip’s, the trend is clear. If you’re not painting the worst case scenario for Apple – regardless of whether or not everything you cite to reach that conclusion is wrong – your voice disappears into an echo chamber of unclicked me-toos. Chowdhry is a new kind of worst-in-breed: he selects only the narrowest band of data and draws conclusions that have no causal relationship whatsoever. It’s anti-analysis wrapped in a chewy coating of misspellings, awkward grammar and diction. He’s a caricature analyst, a bloated-head model of embarrassment for the analyst community – and considering the snake’s belly standard for that lot, that’s saying something.

Update: Incredibly, on the heels of the excrement he slung above, Chowdhry again landed on CNBC, this time on its website as the first analyst quoted regarding the “iWatch”. From the fecal fountainhead himself, after claiming Apple had but 60 days to produce an iWatch (no chance of source link, but hat tip to Gruber):

“It will take years for Apple’s $130 billion in cash to vanish, but it will become an irrelevant company … it will become a zombie, if they don’t come up with an iWatch.”

When I said the tech news ecosystem was a steaming pile, I never thought I’d get affirmation so soon. Add CNBC to the list of dipshit media outlets willing to let people calling themselves analysts parade their intellectual incontinence down their street.

 Posted by at 10:13 am

  5 Responses to “The Worst Apple Analyst Has Just Upped His Game”

  1. Could someone please drench chowdhry’s turban in Ronson lighter fluid and set him ablaze! Please, I beg you, in the name of all that is holy!

  2. Agreed. Metaphorically, at least.

  3. Trip makes Enderle look almost sane.

  4. And a few months later…

    Chowdry raises his target from $115 to $130 saying among other things.. “Apple’s innovation is back!”

    As if Apple’s innovation left on a vacation somewhere and suddenly decided to drop in.

    Apple Watch, Apple Pay and iPhone6 did not just happen in the last few months. The shortsightedness of analysts is amazing. Apple was an innovative and great company 6 months ago.. and it’s great now.

    Kudos Tim for not letting “analysts” divert your attention to things that matter.

  5. It’s jackasses like Chowdhry that make me have to choose between writing another blog post or sorting my sock drawer. It’s clear that Chowdhry knows absolutely jack shit about Apple and has made a career wrongly predicting their demise with evidence that I could best describe as the contents of your average Penn Station toilet after a Rangers game. Yet he gets ink – repeatedly. Give him another 6 months and he’ll be predicting gloom and doom again. It’s like watching a dog eat its own vomit.

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