iPhonAsia issues our 2nd Dean Wormer Award
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And the co-winners are … drum roll please … Royal Bank of Canada and Canaccord Adams
iPhonAsia comment: Opinion Alert! The following post is just one man’s opinion (yes bias) and our view is unabashedly pro Apple (AAPL). See also related post > Does RBC have a leaky Chinese Wall?
In mid January ’09, two Canadian investment research firms turned negative on Apple (AAPL) and positive on Research in Motion (RIMM). Specifically, on January 18, 2009 the Royal Bank of Canada’s Mike Abramsky placed a sell recommendation on Apple with a $70 price target. AAPL at that point in time was trading at $82.83. Soon after this RBC downgrade, Apple posted Q1 2009 earnings. Apple handily beat Street analysts’ consensus. As of today (2/6/09), Apple (AAPL) is hovering near $100 per share … some 30 points above RBC’s target price. Not long after RBC went negative on Apple (AAPL), Canaccord Adams issued a “pro-blackberry, anti-iPhone” (my characterization) research report. EXCERPT: “Canaccord believes Apple’s earnings suggest that Research In Motion has retaken its market share dominance over Apple” Canaccord placed a buy rating on RIMM with a target of $60 and a hold rating on AAPL with a target of $90.
When will RBC’s Mike Abramsky raise his $70 price target on Apple (AAPL)?
There are far less capable Apple (AAPL) analysts than our Canadian friends, yet I have to wonder why a relatively sharp analyst like Mike Abramsky would dare go so negative on Apple (AAPL) and just a day later go so positive on Research in Motion (RIMM). If it’s not ignorance then what is the motivation for RBC’s and Canaccord’s calls? We suspect that there is a decidedly blackberry odor blowing in the north winds. In my opinion, there may also be biases that leaked through the firewalls that are supposed to separate a firm’s “research” from “investment banking” activities.
The North Winds Royally Blow it on Apple (AAPL)
The following is an excerpt from a Silicon Alley Insider post on January 18, 2009. The Henry Blodget post was titled: Apple Cut To SELL On Weak Management Team (AAPL). Read > HERE ….
EXCERPT: A Wall Street analyst has said what a lot of folks have been thinking, which is that Apple (AAPL) is a far weaker company without Steve. Mike Abramsky of RBC cut the stock to SELL with a $70 target–a stark contrast to the near-$200 hallucinations that most of the Street is still maintaining.
The editor of iPhonAsia (Dan B) added a few comments to this post … see below. Note: This is a redacted version … full post/comments can be found > HERE
COMMENTS:
Here are a couple of links re Apple’s executive management team and Tim Cook, Apple COO…
http://www.cnbc.com/id/15837548/cid/118190
http://money.cnn.com/2008/11/09/technology/cook_apple.fortune/index.htm?postversion=2008111005
http://idannyb.wordpress.com/2009/01/15/apple-aapl-buying-opportunity-we-think-so/
RBC (Royal Bank of Canada) disclosure information: RBC is a major investor in RIMM. In addition, RCB’s Chief Operating Officer, Barbaras Stymiest, sits on the Board of Directors at RIMM.
“RIM, RBC and Thomson Reuters share the common belief that mobile applications and services will propel the industry forward and the BlackBerry Partners Fund is being formed to help fuel innovation and activity in the mobile ecosystem.”
“Barbara G. Stymiest, FCA has been the Chief Operating Officer of Royal Bank of Canada (also known as RBC Financial Group) of Liberty Life Insurance Company since November 1, 2004. Ms. Stymiest is responsible at Royal Bank of Canada for its strategic development as well as all corporate functions including risk management, finance and treasury. She is responsible at Liberty Life Insurance Co. for directing enterprise strategy, as well as all corporate functions including …”
http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=8279227&capId=109809&previousCapId=399960&previousTitle=Research%20In%20Motion%20Ltd.
Also, from RBC’s website — somebody better tell them if she’s not the Chief officer, because she’s still listed there:
http://www.rbc.com/newsroom/down2-stymiest.html
“Ms. Stymiest currently serves as a director of RBC Dexia Investor Services Limited, Research in Motion Limited, Symcor Inc., Canadian Institute for Advanced Research, Royal Ontario Museum and Toronto Rehabilitation Institute Foundation. She has also served on a … ”
from http://www.rbc.com/newsroom/down2-stymiest.html
(The Royal Bank of Canada website)************
http://metue.com/05-12-2008/blackberry-partners-fund-vc-fund-launches/
http://www.rbc.com/vp/
“Monday, RIM announced the formation of a $150 million fund to invest in services and applications for their rival Blackberry platform. Canadian VC firms JLA Ventures and RBC Venture Partners are lending expertise to manage the fund. The fund will be called the Blackberry Partners Fund. The fund is anchored by capital commitments from RIM, RBC and Thomson Reuters.”
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“Nothin is over until we say it is!”
“If you mention extortion again”
[youtube=http://www.youtube.com/watch?v=bK-Dqj4fHmM&hl=en&fs=1]
[...] an aside, last week, Abramsky was the co-recipient of iPhone Asia’s tongue-in-cheek Dean (”Animal House”) Wormer award for bad advice. His [...]
[...] Does RBC have a leaky Chinese Wall? iPhonAsia comment: We’d like to give another Dean Wormer Award to RBC’s Mike Abramsky, but there’s a strict limit of one per customer. What [...]
I still “get” the award?
Brother, I earned the award then I defended it with little rancor, considering, and a rather free-flowing debate. “Good humor” is the eye of the beholder but I did reverse the trade (I’m a trader) and make money by flipping from negative to positive on the same stock… the ability to change an opinion on the same stock in a lucrative manner is the Holy Grail for traders.
But I digress. Those guys can have my title when, and only win, they pin me in the center of the ring for the three count and/ or make me tap in the octagon.
I mean… it’s the most time honored tradition in any form of combat, perhaps best phrased by Ric Flair: “The BE the man, you have to BEAT the man… WOOO.”
All the best. FWIW, and I know you guys are more the long term hold set, I’m not crazy about the tape here but, strictly as a trade, if Apple holds $100 I think it’s worth staying a little long (though, in full disclosure I took gains).
Again, best wishes and thanks for, um, thinking of me.
-Macke
Hey Jeff,
Welcome back! Noticed you’ve been more favorably inclined towards apple (AAPL) of late … Glad to see there’s hope … we may never convert you to a “buy and hold” guy, but I won’t give up trying … at least when it comes to AAPL at current bargain prices.
Been one heck of a last 7 months or so in our markets.
I’m halfway tempted to rescind your Dean Wormer, but it’s a badge of honor that you’ve worn with class and distinction. Thanks for being a good sport.
Abramsky, on the other hand, hasn’t even bothered to show his face. He still has AAPL @ 70 and RIMM @ 75. And he’s not just a RIMM fanboy … I heard he pumped Palm (PALM) too… He might need to stay in hiding for awhile.
No need to rescind it; I’m happy to wear and defend any title. If I couldn’t defend it, it would at least imply I was talking out my arse when I made the statement in question.
I talk a lot. I talk too fast. I’m wrong slightly less than 50% of the time. But I never, ever, talk total BS unless I’m just picking a fight with Pete because the show needs a pick-up.
It may have been the wrong reasons as you guys see it (and unquestionably tasteless to think Jobs sickness and a product lack wasn’t “in the AAPL stock at $150) but the trade worked on Apple for me. Of such distinctions, and those who find offense, are cage-matches born… or at least disputes that leave us all a little smarter. No one gets hurt and, relative to internet debates, this was borderline Algonquin.
I’m favorable on Apple because I didn’t buy it until the 80′s. I’m a trader. Morally speaking, my liking a company that got me 25% and doesn’t poison countries like Union Carbide makes me Mother Theresa.
I think Apple is best of breed… it’s the breed I’m more concerned about than the company.
All the best,
Macke
PS
Dan, if you’re ever in NYC stop by to the show. We’ll got to the actually Algonquin bar and debate like Dorothy Parker and Papa Hemingway. Dibs on Papa…