“Apple Computer Inc. shares fell more than 4% Wednesday when the company said it would replace units of its new iPod nano, after complaints that screens on the tiny portable music players are prone to cracking and scratching,” Rex Crum reports for MarketWatch. “Apple shares fell $2.56 to $50.88 in afternoon trading on volume that was nearly double the three-month daily average. Earlier, the shares touched $50.70… Apple CEO Steve Jobs took a calculated risk by replacing the best-selling iPod model, called the mini, with an even smaller device. Apple is touting the nano’s small size in its marketing campaign, a move that could backfire if the product acquires a reputation for fragility.”
Full article here.
Apple shares currently stand at $50.77, down $2.67, a loss of 5.00%, on heavy volume of 30,134,454.
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Ride my seesaw. Thats the way things go in stockland. It’ll go up again, don’t sweat it. The people that throw their stocks away at the first sign of a (imagined) problem are just nervous little fidgets.
mw: develop as in monkeyboys mantra lol.
I felt water drip on my head, the sky must be falling!
The stupidity of the – mainly – American investor.
Apple is likely to lose a massive $400,000 replacing the defective iPod nano units, I reckon around 0.1% of 2 million units = 2000 units @ (let’s say) $200.
And the market has bailed to the tune of around $1.75 billion according to my loose mental arithmetic.
Sounds like a buying opportunity to me.
AAPL on sale today, up to 4% off. Get ’em while their cheap!
* Problem affected a tiny faction of a percent of buyers
* Problem already solved and won’t affect any more buyers
* Replaced for free for those affected
* Apple responded quickly in identifying the flawed component and keeping the public informed–kudos
* Only a fraction of shoppers heard about the rumored problem anyway
* Apple was going to sell every player they could crank out no matter what, anyway
* The reviews are great
* The holiday shopping season hasn’t even hit yet
* So…. wait for it! …Apple is doomed!
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This is what we call “dumb money” — folks who follow the herd without knowing why.
I cannot wait for Christmas to come and go so that I can see my Apple stocks soar.
This is another buying opportunity. People who are selling on this news deserve to get ridden out of town (the stock trading kind). Well, that just leaves more for the rest of us.
But it just goes to show the state of “journalism” in this country, when the press acts to perpetuate and inflate practically non-existant issues as if they were verified, widespread fact. It’s funny to see the press rely on the “other guy” to do the verification and assume when something is published, it must be true. Then they go around contratulating themselves for being “on top of the story.” What a joke!
this is what i’ve been waiting for! time to buy, buy,buy
isn’t it funny how the few people’s complaints about the screen have changed Apple’s stock value so quicky and significantly? Kinda makes you think what just us Mac users can do to the opressive Windows userbase…..
Oh well, at least Matthew Peterson’s self serving rants were good for one thing. An AAPL buying opportunity.
And NewType, you absolutely couldn’t be more right.
Just wait to Christmas and see what the number 1 selling item on Amazon will be? I’m sure the share price will go up!
Cheers,
Tim.
keep selling. It’ll be cheaper to buy now. thanks to the panicki!
Saved by the bell.
Time to scoop myself up off the floor and start doin’ shots!
MW= air, as in I need some!
-To infinity and beyond
I’m buying a remote controled sailboat…can’t be too much more
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than an iPod nano! (I hope it lasts)
CT ======]————- no trailer required
I know it’s farfetched… but wouldn’t it be interesting if Mr. Peterson was sitting on a short position for AAPL?
If it´s negative about Apple I don´t like it.
Blame the messenger, not the company that makes the product. Apple consumers are always wrong in their complaints, Apple the company is always right in saying there are no problems.
Why did the cube have to die? As he SCRATCHES his head trying to remember that word….
Plastics.
SCRATCHES.
It’s interesting Apple responded so fast – usually they take much longer over quality issues such as these (iPod battery anyone?)
Is this due to the fact that yes, there is a sh*t load riding on the iPod nano? Or is it because they’ve learned their lessons from the past battery and other issues?
However, the stock sliding a couple of bucks (together with about 50c yesterday) just shows how jittery the market can get.
To be honest, as an Apple shareholder, I’m more concerned over Warner Bros. comments with regards to iTunes Music Store.
HyperDiaper,
The Cube did not died because of “scratches.” The Cube died because it was seriously overpriced at intro that it wasn’t even funny. And when Apple finally cut the price by $500+ to unload the inventory, the Cube flew out the doors.
Too bad Apple cut the price only after they decided to cancel it.
This is a non-issue that Apple bashers and those afflicted with iPod-envy are trying to hype up beyond all reason. You can’t compete, then the only recluse is to throw around some FUD.
Please, not more America bashing, okay? Short-sighted stock market investing is a global matter. Do we really have to bash unnecessarily? Does it make you feel smug and superior? Or are you just out of the money altogether? BTW, now is a good time to buy.
MW: “off” as in “find the off switch and use it”
Sick of the Name-Calling – what planet are you on and what are you talking about??? America bashing???
Put down the crack pipe and have a beer.
So, $2.36 wiped off the share price which comes to $1.958 billion wiped off the market cap of AAPL today.
Let’s say that AAPL trades at around 40x earnings, which means that somehow the investment community (or suckers, depending on your viewpoint) seems to think there is around $50 million in bottom-line bad news in this story.
Let’s say that 2 million iPod nano units are out in the field, and the lemon rate is 0.1% (1 in 1000): we have 2000 lemons at a replacement cost of $200 which comes to $400,000.
Now let’s say that, with the iPod mini, Apple had a “lemon” rate of 1 unit in 5000, so 2 million mini’s would have yielded 400 lemons at a replacement cost of $150, which is $60,000.
So the net iPod nano downside is $340,000.
Now lets say that 1 million people choose to defer their purchase of a nano at an average of $225, but 10% of that one million will never return to the nano market or Apple. That’s 100,000 customers at an average of $225, which comes to $22.5 million in sales and – @ 18% gross margin – $4 million profit.
So now the liability meter stands at $4.3 million.
Now lets say that Apple now has to increase advertising spend by $10 million globally to counter the bad publicity: now we’re up to $14.3 million.
But that’s really where the sums run out of steam: the market has over-reacted in a hysterical way today and the only sensible thing to do under such circumstances – assuming you have the funds – is to pick up the shares whilst they’re cheap.
Folks, relax. Apple stock’s meteoric rise of late is almost certainly driven by speculators. Speculators are not in the stock for the long haul and dash at the first sign of trouble. Apple’s stock price will not collapse — if anything, this may get it down to a more stable level, and a good buying opportunity.
The post 2:00 slide had to do with a Merrill Lynch downgrade.
Great timing, huh?
I smell a conspiracy.
-to infinity and beyond
“Oh well, at least Matthew Peterson’s self serving rants were good for one thing. An AAPL buying opportunity.”
What I did was far from self serving and more then just a rant. I can’t believe you people still going on like Apple never admitted there was a problem. These stocks didn’t fall because of the media. If that were the case they would have fell Monday (which they didn’t). In fact it wasn’t until Wednesday, the morning after Apple made the announcement. Why does everyone insist on giving Apple everything except the blame. Apple is the one who let a faulty product hit the market, Apple is the one who admitted it. Why are you people so blind? I dont care if it was .1% or .01%, the fact is, some got out, and with the high sales of iPods, a small percentage is still a lot of people. Even if it was only 1000 units that is still ~$250,000 worth of product. That isn’t a big issue for you? If it isn’t then please feel free to write a $250,000 check to Apple to cover the cost of replacing these units. Sure investors may not have made the most educated decision in selling their stock, but you don’t know what caused their decision. Most of them have probably been through all of the other class action suits, recalls, and replacements, and maybe this was the last straw for them and they wanted to go for something more solid. I suppose Oil fluctuation is somehow my fault as well.
Time to buy!!!