Apple can’t respond to rumors of iPhone 5 cuts even if it wanted to

I’ve been asked a lot today why Apple hasn’t responded to the Wall Street Journal article saying that there have been massive cuts to iPhone 5 orders. The simple fact is, they can’t.

SEC rules prohibit Apple from talking publicly about the company. This is known as a quiet period and all publicly traded companies must adhere to these rules.

The Wall Street Journal can publish more of its “according to a person familiar with the matter” and there isn’t a lot Apple can say.

Apple is scheduled to release its Q1 2013 earnings on January 23, 2013 — next Wednesday.

  • Jeff

    This needs to be made known on a widespread scale.

    • Walt French

      I’ll go you one better: people who don’t understand basic games and or laws of randomness shouldn’t be worried about individual stocks’ performance. Worry instead about meaningless ups and downs in the broad market.

      People who understand diversification either do so, or know they have to be VERY well informed vis-à-vis the average (actual, knowledgeable) professional investor who’ll be trading thousands, not dozens of shares at very favorable spreads/commissions

  • Confused; why are they in a quiet period now? Is it due to their impending earnings call?

    • Yup – earnings call on January 23rd.

  • Canucker

    And the earnings call will reveal another blow out quarter. Just check StockTwits for the masses of traders playing with this stock. Never contributed a red cent to innovation but play the markets like gamblers with other peoples money.

  • MattC

    They are not offering any additional securities for sale at the moment so they are not in a quiet period. They have, however, begun a $10 billion share buyback, and from their perspective should want to buy it back as inexpensively as possible. As a long term shareholder, I do too.

    • Not My Real Name

      Agreed. This article completely misunderstands what is covered by the quiet period rules. Apple can make any public disclosures they choose in advance of their earnings release.

      • “However, a quiet period extends from the time a company files a registration statement with the SEC until SEC staff declare the registration statement “effective.” During that period, the federal securities laws limit what information a company and related parties can release to the public. The failure to comply with these restrictions generally is referred to as “gun-jumping.”

        …so what does that mean? is the registration statement what a company files before their earnings call, and it becomes effective when the call happens? presumably, only the SEC knows what apple’s going to announce next week… one would think apple can’t say anything to “tip their hat” about earnings.

  • I don’t think you know what the SEC “Quiet Period” means.

  • Winski

    The piece in the WSJ was a hit piece. This used to happen like clockwork to us at Dell a few years ago, EVERY QUARTER, about a week before earnings. BY THE SAME GUY !!!

    Considering who the WSJ and it’s klan of klowns work for (Murdoch), NONE of what comes from the WSJ is worth the paper it’s written on.

  • TNSF

    Quiet periods are self imposed and subject to exceptions. The article is not accurate. However that doesn’t mean the responding to rumours is in Apples best interests.

  • It would be more accurate to say that in many cases, Apple prohibits Apple from talking publicly about the company.

  • ankleskater

    Makes sense. But one question – how come Nokia can “pre-release” their sales numbers?

  • Norman

    Just read this article, seems like what is happening…. Also this seems to apply,

    Bear raids are different. This is stock manipulation with the goal of profiting from the decline. Firms will sell stock short directly driving down the share price. Rumors of business problems are floated, people start saying things like “the chart has gone bad.” Shareholders get scared and sell and the rout is on, feeding upon itself until value investors step in and give the stock a floor.

    Tree shaking is bear raiding with the goal of buying low. Suppose a firm is in love with a particular stock, and they are going to take down a big chunk. It is in their best interest to tell the world what a great stock this is before they move in, right? Of course not. That might drive the price up before they buy. They will stay tight-lipped, or sometimes they will use the bear raiding techniques of creating fear to drive the share price down in shock-and-awe “how much worse is this going to get I better sell right now” scare sessions. Then, in the volume of the sell-off, and at discount prices, the firm will buy their shares. They “shake the tree” to see who will capitulate and sell them their shares.

  • Apple never responds to rumors, why should this one be any different.

    • “Apple never responds to rumors”

      Not true. Apple has responded to many rumors over time. Certainly not the majority of them or even a “lot” but they have responded on many occasions.

  • macsimcon

    Companies like Apple self-impose a “quiet period” to avoid the potential of breaking the law by selective disclosure to just a few analysts.

    There’s nothing wrong with Apple making a disclosure in the few weeks prior to an earnings announcement, so long as the disclosure is public.

    If this is benefitting Apple in their stock buy-back, I smell stock manipulation..

    On the other hand, could all this be a well-engineered project to take Apple private?

    • “could all this be a well-engineered project to take Apple private?”

      LMAO WOW! I want a little something something of what you’re smoking!

      • He just needs to find a few people sitting on several tons of platinum and he’s all set.

  • Lukas

    Now that we know that the SEC thing isn’t true, will there be a correction?