Leonid Kanopka on Apple: Seeking Alpha hits a new low

November 30, 2011, 4:15 PM UTC

A price target of $85 suggested by a writer “a few fries short of a Happy Meal”

When you have — as Seeking Alpha does — 4,000 unpaid contributors putting up an average of 250 articles a day, you are bound to post a few clunkers.

But the financial blog that made Time‘s “50 Best Web Sites” list, Forbes‘s “Best of the Web” and Kiplinger’s2007 Best” hit a new low Tuesday when it published Leonid Kanopka‘s “The Apple Bubble Is Ready To Burst.”

In the space of 688 words, Kanopka — who describes himself as an analyst for a Fortune 500 bank — manages to touch on nearly every anti-Apple trope in the book, comparing the company to the tulip bubble of 1737, the dotcom bubble of 2000, Saddam Hussein’s Iraq and a Chinese economy he describes as “spiraling out of control.”

Without supportive evidence, he claims that:

  • With a price in the upper $300s the stock “appears to be highly overvalued”
  • “The market is saturated with Apple products,” i.e. everyone who wants one has one
  • “Most Apple products are price-sensitive” and are particularly vulnerable in a recession
  • “The law of large numbers” means the company cannot continue to grow “at this blistering growth rate”

Each of these claims can be easily shot down — and nearly every one of the 157 readers who had commented on the piece by Wednesday morning were happy to oblige. (My favorite described the writer as “a few fries short of a Happy Meal.”)

But Kanopka’s real clincher was his price target:

“I believe a fair price for AAPL is $85, slightly higher than its book value. With a huge selloff, this stock could even go lower.”

I don’t know where Kanopka got that book value, but as more than one reader pointed out, Apple’s 923.7 million shares at $85 apiece would be worth $78.5 billion — less than the company’s $81.6 billion in cash and marketable securities.

According to Wikipedia, Seeking Alpha has 80 employees on three continents. Did any of them bother to read this item before they published it? Or the Andy Zaky piece that Seeking Alpha published 24 hours earlier that made a considerably more credible case that Apple (AAPL) is the most undervalued stock in the S&P 500?