Apple shares traded lower in premarket trading in New York after Jefferies downgraded the world's most valuable company from "Hold" to "Underperform." Adding to the pressure, independent research firm Counterpoint revealed disappointing iPhone sales data in China.
Jefferies analysts led by Edison Lee downgraded Apple to Underperform from Hold, slashing their price target of $211.84 to $200.75. They cited underwhelming iPhone sales in the world's largest handset market that weren't being boosted by AI hype, adding that Q1 2025 revenue will unlikely be met.
Lee also reduced the outlook for the iPhone 17/18 due to slower AI uptake and commercialization, adding that Apple's AI outlook appears "subdued."
The analysts noted that iPhone and consumer electronics sales were weaker than expected.
Adding to the gloom, Counterpoint's Market Pulse Service showed China's smartphones declined 3.2% YoY in Q4 2024, marking the only quarter in 2024 to log a YoY drop.
Counterpoint Associate Director Ethan Qi commented on the report, "The country's smartphone market saw a rebound in the first three quarters of the year, with positive YoY growth each quarter. However, momentum began to slow in Q4 as consumers adopted cautious spending behavior."
The report showed that the iPhone lost the top position as China's best-selling smartphone, falling from first to third in the fourth quarter of 2024: "During the quarter, Huawei took the top spot, followed by Xiaomi and Apple."
iPhone sales tumbled 18.2% YoY in the quarter.
Counterpoint Senior Research Analyst Mengmeng Zhang said, "In Q4 2024, Huawei climbed to the top spot with an 18.1% share. This is the first time since the US ban that Huawei regained the leading position. Huawei's sales increased 15.5% YoY driven by the launch of the mid-end Nova 13 series and high-end Mate 70 series."
Apple faces intensifying market competition from Huawei and other Chinese brands expanding into the premium market. Apple had about 17.1% market share last quarter.
Counterpoint's data is nothing new for readers who have known for months about the muted launch of Apple Intelligence:
Apple Slides After Guiding Below Consensus, Missing On Wearables, China And Service Revenues
Foxconn Sales Growth Slows Amid Underwhelming AI-Enabled iPhone Upgrade Supercycle
Global Smartphone Sales Rebound, But Apple AI Falls Short Of Sparking Upgrade Boom
Goldman's Allen Chang and Verena Jeng recently provided clients with insights into Apple's big dilemma in China: How it plans to compete with Chinese brands offering low-cost, AI-equipped smartphones priced as low as $168.
In a separate report from another independent research firm, Canalys, last week, iPhone sales in China plunged by 25% YoY for the final quarter of 2024.
The takeaway is that AI-equipped iPhones failed to excite Chinese consumers, who are increasingly gravitating toward cheaper domestic-made AI smartphones. How can Apple compete?
Come on, Tim Cook. Think... Moar stock buybacks?
By Mark Glennon of Wirepoints
Bally’s, the big casino operator, is selling shares only to women and minorities in its new gambling resort mecca being built in Chicago’s River West neighborhood. A minority preference of some kind was a condition to city approval of the project, and this is what the city and Bally’s agreed to.
Yes, that appears blatantly illegal, but wait to understand the deal before deciding whether it’s truly doing any favor for women and minorities. Opinions may vary on that. The offering is being promoted by the City of Chicago Treasurer and some city aldermen.
Let’s start with city officials hyping the sale, as reported by The Triibe. Last Thursday, “City Treasurer Melissa Conyears-Ervin and members of the Chicago Aldermanic Black Caucus hosted an information session in the 21st Ward, the city’s largest Black ward, to inform residents about an opportunity for minorities and women to “create generational wealth” by buying shares in Bally’s Chicago, Inc.
“The most captivating part,” The Triibe wrote, “was when residents learned that they could put up as little as $250 of their own funds to partake in the investment that presenters expressed as the biggest benefit to the Black community.”
“Generational wealth”? “Captivating”? “Benefit to black community”?
Here’s the deal that’s offered, which is detailed in the company’s S-1 filing with the Securities Exchange Commission and other company materials: Instead of just buying one share for $25,000, a buyer can put up as little as $250 and Bally’s will loan you the remainder of the purchase price. You thus buy an “Interest,” as it’s called in the offering documents.
A buyer will never see any dividends until the loan is repaid plus interest at 11% annually, compounded quarterly, and that could be a long, long time, if ever. The company says in its S-1 that it currently expects not to have cash available for distribution until approximately three to five years after the Chicago facility opens, which they are targeting for September 2026. “However, this may fluctuate depending on ”the ability to generate cash from operations and its cash flow needs and payments on senior debt.” At 11% compounded quarterly, the loan balance would double in less than six and a half years.
The good news is that the loans are nonrecourse, meaning a buyer is not personally liable for repayment; only the shares that would be bought with the loan is at risk. A buyer therefore could put down the small amount of $250 in exchange for a hope and a prayer that everything will go well and the investment eventually pays off.
That’s not necessarily irrational, being akin to buying a cheap, out-of-the-money option on a stock. Kind of like playing a slot machine though hopefully with fair odds. I can’t assess whether it’s a fair bet of that type. But it’s hardly a ticket to “generational wealth.” The Interests are indeed highly risky and speculative, just as the offering documents say.
The Interests are subject to extensive transfer restrictions and won’t, at least initially, be traded on any public exchange, so “you may find it difficult to sell your Class A Interests,” as the S-1 mildly puts it.
If that’s not enough, read the Risk Factors section of the S-1 – all 40 pages of it. It’s daunting, to put it mildly. Also daunting is the corporate structure behind the process through which earnings would flow to pay off the loans.
All this comes as concerns mount that the gambling business in Illinois is cannibalizing itself through the proliferation of betting sites and methods. That was reflected in the most recent report last year by Illinois Commission on Governmental Forecasting and Accountability. There “are concerns of oversaturation,” as the report put it, and Illinois casino revenue was essentially flat from 2023 to 2024.
Aside from all women, the minorities for whom the offering is open is broad and vague. It includes pretty much any group that the City of Chicago decides is disadvantaged, which you can see in the relevant section from the S-1, reproduced below.
Loop Capital Markets LLC is the lead placement agent on the offering, meaning they quarterback the deal for Bally’s. Loop is a prominent, politically connected, minority-owned financial firm in Chicago.
City of Chicago Treasurer Melissa Conyears-Ervin is perhaps among the politicians least qualified to be promoting the deal. She was fined last year for violating the government ethics ordinance by firing whistleblowers and improperly using city resources. We’ve criticized her here for failing to provide even the most basic information that should be expected from a treasurer and for a misguided divestiture from fossil fuel makers.
Ald. Ronnie Mosley (21st Ward) was also there Thursday night boosting the deal. “Tonight is about a new opportunity on how to participate, about not just being a consumer but to be an owner,” he told the crowd of a couple hundred people, according to The Tribe.
They apparently sold many in the room at Thursday’s event, according to The Triibe, whose article also reads like a puff piece. They quoted one attendee from Chicago’s Chatham neighborhood who said, “It’s so many ways you can invest. I mean, to go from $250 all the way to $25,000, I mean, if you don’t have any money and all you have is 250 and they let you in,” she said. “That’s, like, a no-brainer for me, and then it’s a no recourse loan, so therefore you’re not liable for it if it [the project] doesn’t go through.”
Could the deal be challenged as illegal discrimination? Yes, absolutely. I can think of no plausible defense to such a challenge and I have found no precedent for a similarly exclusionary securities offering.
Is it the type of deal that should be sold for minorities to build “generational wealth”? Absolutely not.
* * *
Groups eligible to buy interests, from S-1:
This offering is only being made to individuals and entities that satisfy the Class A Qualification Criteria (as defined herein). Our Host Community Agreement with the City of Chicago requires that 25% of Bally’s Chicago OpCo’s equity must be owned by persons that have satisfied the Class A Qualification Criteria. The Class A Qualification Criteria include, among other criteria, that the person:
MCC 2-92-670(n), in turn, defines Minority as:
President Trump fired four high-profile presidential appointees just after midnight Tuesday, including Gen. Mark Milley, and Biden's top envoy to Iran, Brian Hook (who also served in the role during Trump's first term).
"Our first day in the White House is not over yet! My Presidential Personnel Office is actively in the process of identifying and removing over a thousand Presidential Appointees from the previous Administration, who are not aligned with our vision to Make America Great Again," Trump wrote on Truth social just after midnight Tuesday.
"Let this serve as Official Notice of Dismissal for these 4 individuals, with many more, coming soon,” Trump said before listing off the four officials in the post that ended with “YOU’RE FIRED!"
Hook was fired from the Wilson Center, Milley from the National Infrastructure Advisory Council, while celebrity chef José Andrés was chopped from the President's Council on Sports, Fitness and Nutrition, and former Atlanta mayor Keisha Bottoms was axed from the President's Export Council, after she dropped out of the Atlanta mayor's race to work as a senior advisor on Biden's reelection campaign.
Andrés, the founder of World Central Kitchen, has questioned whether Trump can carry out his ambitious deportation plans, and seems to be considering a future in politics himself.
The celebrity chef said he submitted his resignation from the post last week and that his term was already up. He elaborated that he was “honored” to work as the co-chair and asked Trump to allow the council to continue its work. -The Hill
"I’m proud of what we accomplished on behalf of the American people…like a historic partnership between the White House and every major sports league to increase access to sports and health programs for kids," Andres posted Tuesday morning on X.
Bye Felicias...
The Federal Reserve now needs to be on Trump watch if it wants to engineer the proper dose of monetary policy, according to Bank of America chief Brian Moynihan.
"They've got a new administration with a new set of fiscal policies, and the monetary policy has to respond to that," the BofA chair and CEO told Yahoo Finance at the World Economic Forum in Davos, Switzerland.
Moynihan added: "We are not a central bank-led economy. We're actually a private sector-led economy, of which the government supports, of which the central bank responds to, and they have to think of what stimulus they're going to respond to."
The Fed, of course, is always one to play up its independence from the White House.
What has unnerved the markets to start 2025 is the Federal Reserve not committing to aggressive rate cutting, alongside a stronger-than-expected US economy.
The consensus among Fed officials is now for two rate cuts this year, down from the four forecast in September. The monetary policy body remains concerned about inflation — San Francisco Fed president Mary Daly was non-committal on more rate cuts on Yahoo Finance's Opening Bid podcast recently.
Potential moves by the Trump administration, such as tariffs on China, further cloud the outlook for inflation.
Not helping matters is the renewed rise in oil prices to kick off the year. The US economy has also shown impressive resilience, including a blowout December jobs report.
"The fact that the narrative has shifted is because the economy is stronger because the labor market is stronger," BlackRock's chief investment and portfolio strategist for the Americas, Gargi Chaudhuri, said on Opening Bid. "I think one to two more rate cuts in this cycle based on the data at hand, is fair to assume with a very open mindset."
Only dual route gene transfer therapy in development to treat Friedreich’s ataxia with FDA IND clearance and Fast Track designation -
Amylyx Pharmaceuticals, Inc. (NASDAQ: AMLX) (“Amylyx” or the “Company”) today announced that the U.S. Food and Drug Administration (FDA) has lifted the clinical hold placed on the Phase 1 clinical trial of AMX0114, an investigational antisense oligonucleotide (ASO) targeting calpain-2 for people living with amyotrophic lateral sclerosis (ALS). With the clinical hold lifted, Amylyx is now working to open U.S. sites for screening, enrollment, and dosing.
The announcement comes as Amylyx expects to initiate the Phase 1 LUMINA clinical trial in Canada in the beginning of 2025. LUMINA is a multicenter, randomized, placebo-controlled, multiple ascending dose trial evaluating the safety and biological activity of AMX0114.
LUMINA will also assess ALS biomarkers, including change from baseline in neurofilament light (NfL) levels. Approximately 48 people living with ALS will be randomized 3:1 to receive AMX0114 or placebo by intrathecal administration once every four weeks for a total of up to 4 doses.
