$AAPL Goosed 3.1% on an Early iPhone 5S Rumor

| Analysis

Shares of Apple Inc. rose more than 3 percent on Monday, goosed in part on rumors that the company could begin selling the next iPhone in July. $AAPL closed at US$430.12, a gain of $12.915 (+3.10 percent), on heavy volume of 22.8 million shares.

AAPL Chart for April 29th, 2013

AAPL Chart for April 29th, 2013
Courtesy: Yahoo! Finance

The ballyhoo was sparked by French site NowhereElse, which published a document leaked from Japanese carrier KDDI. That document laid out plans to take preorders for the next generation iPhone (specifically the iPhone 5S) on June 20th for a July release of the device.

AppleInsider noted that the document included new features, the most important of which is a fingerprint reader. Apple has long been speculated to be bringing in fingerprint identification to its iOS ecosystem since the company purchased AuthenTec—a fingerprint ID technology firm—in 2012. The document also mentioned iOS 7 and a 13 megapixel camera.

It's nonsense, or at least the alleged timing is nonsense. Apple CEO Tim Cook made a point last week of telling analysts that Apple will be delivering new products in the fall—i.e. not this summer—and there are no credible reports in Apple's supply chain indicating that production of a new iPhone is ramping up.

As Credit Lyonnais Securities Asia put it to Marketwatch, "No way. Component suppliers are only beginning to ramp production in June/July. Phone will not hit until late summer/early fall."

Nonsense or not, Wall Street got excited, or maybe investors were giddy at the news that Google Now was available on iPhone and iPad. Either way, $AAPL crossed the $430 mark for the first time in weeks, trading as high as $433.617 in the early afternoon.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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Comments

Lee Dronick

Well it could be announced, and preordered, this summer, with delivery in September.

Jack

It wasn’t the 5S rumor it was the simple math that with Apple’s buyback program, the stock has a bottom fair value going forward of around $530. So basically, if you got the cash, your paying 80 cents for a dollar.

zmarket

Ditto on that Jack, though I’ve seen a higher avg fair value based on the buyback.

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