18% single-day drop in Apple’s share price unjustified?

“When RBC Capital analyst Mike Abramsky downgraded his Apple rating on Monday — helping spark the sharpest selloff in the company’s shares in eight years — he cited a survey that RBC conducted with ChangeWave that suggested that sales of Apple’s hot-selling computers were cooling off,” Philip Elmer-DeWitt reports for Fortune.

“RBC’s version of the survey showed that the percentage of technology consumers who plan to buy a Mac in the next 90 days had dropped from 34% in August to 29% in September, the biggest such decline in more than two year,” Elmer-DeWitt reports. “ChangeWave’s version, which was released Monday… focused on corporate purchase plans. It’s based on a survey of 1,947 individuals involved with IT spending within an organization and shows declines in the percentage of companies planning to buy Apple desktop or laptop computers over the next 90 days — from 8% to 7% for laptops and from 6% to 5% for desktops,” Elmer-DeWitt reports.

“These two bearish signals were enough to persuade Abramsky that it was time to downgrade Apple’s shares, from ‘outperform’ to ‘sector perform,'” Elmer-DeWitt reports. “But in the context of the ChangeWave survey, Apple hardly seems to be performing like the rest of its sector.”

“For one thing, Mac purchases have been trending up even as computer purchases across the board have been slumping,” Elmer-DeWitt reports, “Moreover, in his write-up of the survey, ChangeWave research VP Paul Carlton points out that the 1 point drop in corporate purchase plans for Macs was from a record high in May. He also notes that 18% of his respondents now say that their company is considering Apple for a future purchase, a 1 point increase. Finally, he adds:”

In an upbeat sign for Macs, respondents estimate that 18% of their company’s workforce would choose to use a Mac if it were left up to the employees themselves – triple the 6% who are currently using Macs. – ChangeWave research VP Paul Carlton

Elmer-DeWitt reports, “So there are indeed signs of a cooling trend for Apple, but it’s not at all clear that they justify an 18% drop in its share price.”

Full article, with the ChangeWave charts, here.

[Thanks to MacDailyNews Reader “Market Manipulator” for the heads up.]

As we wrote yesterday, according to Abramsky, 29% of consumers surveyed intend to buy a Mac over the next 90 days. Think about that for a second.

Think about this, too:
Apple smashes Street; reports record third quarter results, all-time high Mac sales – July 21, 2008
Apple smashes Street, reports record second quarter results – April 23, 2008
Apple beats Street; reports best quarterly revenue and earnings in company history – January 22, 2008
Apple bulldozes the Street; reports revenue of $6.22 billion, record 2.2 million Macs shipped – October 22, 2007
Apple smashes Street; posts record Q3 revenue and profit – July 25, 2007
Apple smashes Street, posts revenue of $7.1 billion and record net quarterly profit of $1 billion – January 17, 2007

AAPL lost $20,357,430,480 ($20.36 Billion – with a “B”) in market value [yesterday] and that, dear friends, is simply wholly disproportionate to reality. Period.

Those who keep their heads when others panic often profit handsomely.

Wall Street is a game. If you decide to participate, play it well.

MacDailyNews Note: In pre-market trading today, AAPL is currently up $2.00, or 1.90%, to $107.26.

28 Comments

  1. I’m still holding off…. I was going to buy at 150… then it went to 130 then 120 and now 105…. The apple sale needs to end so I can buy and make lots of money 😀 or atleast recover my portfolio to not average at -34%

  2. It Apple was the only stock hit I’d question why, but that is not the case. The stock market is contracting to realistic levels. The market was at 1000 in 1972, 3000 in 1991, and hit 10000 in 1999. The boom of the 90s is well known to have been a bubble, but the stock market never contracted to reflect for the bubble having burst.

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