Should You Short Apple Inc. (AAPL) After New Iphone Launch?

Last week, Apple Inc. (NASDAQ:AAPL) announced its much-awaited new iPhones, but the overall response by the general public, according to several analysts, was lukewarm at best. According to analysis done by LikeFolio, a firm that tracks online chatter data to gauge the purchase intent for different products, the number of people who want to buy the new iPhones fell to record low since 2015.

Analysts have been issuing warnings regarding the lackluster response and declining orders for iPhones for the last several months, amid saturation of features and several low-cost entrants in the market.

“Two hours and four products later, the end result was a lower level of purchase intent mentions for Apple products/services than we had seen in either of the two prior years,” LikeFolio founder Andy Swan said in a report.

Apple Inc. (NASDAQ:AAPL) is also facing a pricing dilemma. It is forced to decrease the core price of its units because users do not want to buy costly iPhones amid the availability of several other options. But this pricing maneuver comes at the cost of declines in revenue. Goldman Sachs analyst Rod Hall lowered Apple’s earnings forecast after the launch of new iPhones. The analyst said that the price of the XR model was priced lower than his expectations. Hall believes that the pricing of XR will make iPhone 8 and iPhone 8+ “obsolete”. This phenomenon would affect ASP [average selling price] and earnings estimates. Goldman decreased its FY19 EPS estimate for Apple Inc. (NASDAQ: AAPL) from $14.53 to $13.77. The firm reiterated its “Neutral” rating for the stock with a price target of $240, which still shows about 9% upside from the closing price of September 12.

Short interest in Apple Inc. (NASDAQ:AAPL) is also increasing. According to the financial analytics firm S3 Partners, Apple had the highest short interest, worth $10.518 billion. This short interest value was more than Tesla’s, which is currently going through the wrath of the Wall Street.

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