Puzzled Over

Citigroup Needs A CluePod

Marketwatch is reporting that [Citigroup hires buffoons](

> Citigroup cut Apple Computer to hold from buy, citing valuation. The broker told clients it sees little potential for revenue upside versus consensus in the third or fourth quarter of the year. It said gross margin upside should yield 4 cents to 6 cents of earnings-per-share upside in both quarters but that this is largely priced into the shares. On the product front, Citigroup said recent checks suggest that Apple is unlikely to introduce a new video iPod with a larger screen and “virtual click wheel” before the peak holiday season, as the broker had hoped.

It’s a shame that textual blogging is not effected by timespace, because I would love to just replay the words *”as the broker had hoped”* for a straight thirty seconds. Why would the broker hope such a thing? Oh, right, [the damn rumor sites](

Is this how the financial world really works? Someone reads rumor sites, sees that the rumors don’t come true, and then downgrades the company because of it? This is lunacy, sheer and unbridled.

I’m not against financial decisions based on the reality of the situation – say, if the refresh of the entire iPod line had not yielded anything of interest. In my limited experience, this is not the case. There is a lot of interest in the new Shuffle, reasonable interest in the new Nano, and the new iPod Video certainly isn’t dissuading people from purchasing it. Never mind the *rest* of Apple’s product line, which I’ve never seen so much interest in.

But don’t let me stomp on your dreams, Citigroup.