What’s driving Apple share prices lower and when will it stop?

“Nigam Arora‘s technical analysis of the Apple stock price suggests it faces a few key days. At one stage Friday it was down at $558, from above $700 in September,” Haydn Shaughnessy writes for Forbes. “How ludicrous is this? Apple is a top performing company with plenty of room to grow. In the mobile space it is normal to count sales in the hundreds of millions. In computing you are big at 30 million units. Contrast with Nokia. At its peak, the Finnish company sold around 450 million phones a year. Mobile represents scale beyond the dreams of computer makers.”

“So Apple has upside – here’s the story on the iPad mini [Analyst: 2 million of those 3 million iPad sold in first weekend were iPad mini units]. And Apple has reinvented enterprise structures to facilitate extraordinary growth at low relative cost,” Shaughnessy writes. “What’s changed is sentiment. In the past what mattered was trader sentiment – that’s why share prices go up and down – but what matters now is pervasive sentiment.”

Shaughnessy writes, “The right way to deal with it – Cook has to up his game and become more of a peer in the community of people building their businesses around Apple.”

Read more in the full article here.

31 Comments

  1. It would be interesting to be able to see who owned what order flow, but that won’t happen.

    Between high frequency trading, hedge funds, dark liquidity pools and so on aapl will always whip around . It’s been happening for years so its conceivable you could capitalize on the situation. Risky though 🙂 I’ve been thinking for awhile now about how funny it would be if aapl got tapped so hard the stock price was oat parity with their cash holdings. Not exactly impossible with the way it’s been going.

  2. Apple is a consumer oriented company. It’s future depends on a vibrant and growing economy. If the actual produces an administration that increases taxes and punishes business, then the economy will continue to shrink. The increasing population of unemployed and on Food Stamps are not good customers for Apple. If one the other hand we elect a President who keeps taxes low as possible and reduces regulation and actually gives respect to private business owners and encourages their success, then Apple will grown. It all hinges on the crossroads decision tomorrow. Freedom and less government and a thriving private economy or increasing Federal control of everything and further declines in the standard of living and Apple stock price.

        1. Hey, Bush II drove the bus off the cliff then bailed. Now you blame Obama for not stopping the fall in mid air while the Republican congress sets the bus on fire. Good luck with your naive belief in corporations as our saviors. They have no conscience and no morals. If they can squeeze another nickel on the bottom line they will sell you out without a second thought. And small business? How many part-time, minimum wage, no benefits, 7-11 employees can afford Apple products?

    1. Kent,

      People are lining up to buy Apple products in the current economy. People are going online and buying things with almost a month of back order.
      Others are waiting until things can actually be purchased.

      None of these actions are limited by the economy. For most of its products Apple is selling everything they make (hardware wise).

      The problem — for Apple at least — is NOT the economy, in the U.S. or elsewhere. The problem is that the products are not available. Hell, you can’t even pre-order an iMac for delivery before Christmas!

      The economy is not Apple’s problem. Trying to paint it in that light is just political drum beating that has no bearing on reality.

      1. Wait until Obama gets re-elected and the income tax, payroll tax, Obamacare taxes, capital gains tax, death tax are all increased on January 1. Then as jobs are axed from companies try desperately to survive the government which hates them. It will be ugly.

        1. Are all these tax increase subject to a rise because of expiring legislation? If not, they will only rise if Congress passes legislation to increase them. Unless the Dems gain
          Control of the lower house, and a filibuster-proof majority in the Senate, there will be no tax increases.

    2. Yes, yes, yes, we’ve heard rhe right wing’s line ad-nauseum for the past 4 years. Not only is there no evidence to support the claim that tax decreases will boost the economy, there is plenty of evidence around the world to show that they will not do so. Besides, who knows what sort of President Romney would be – he is impossible to pin down, and the mad tea-partiers will be a headache for any president…

    3. I don’t know about that Kent, AAPL has done quite well the last four years under this current president. And he’s no favorite of mine. Something tells me that we will have him for four more years. Although it will probably be a rather close race. But close doesn’t count. Of course a better economy is good for everybody. Certainly good for almost all equities. A rising tide raises all ships. So of course a better economy would bode well for Apple too. But Apple has shown the ability to be a contrarian to the market. Going up when the market is down and sometimes going down when the market is up. But most stocks at one time or another do this. No matter who is elected tomorrow, I believe Apple can do well in the future. I believe this depends upon the actions of Apple and less with whom we elect president of United States of America. Just saying.

  3. One other point. The current tax plan, Obama’s plan, has capital gains taxes roughly doubling in less than two months. So, if you have made money on Apple stock then you face a secession where in two months the government will confiscate roughly one fifth of your gains above current rates. So, Obama and Harry Reid have created a situation where it make perfect sense now to sell to reduce the tax bite. George Lucas sold his LucasFilm production company to Disney specifically due to Obama’s planned tax increase on the “evil 1%”. So, expect a complete market sell off if Obama wins. That is when the real revenge against business begins.

    1. This is completely untrue. There are no plans to change the effective capital gains rate in place right now. George Lucas will have no significantly less tax exposure in the short term. And since policy is not set for the long term, you are just pushing the same old tea party screed.

      1. Actually, there is a change in capital gains coming — if congress *and* the president do nothing. The long term capital gains rate will go from 15% to 20% or your base tax rate, whichever is less..

        This is no where near the doubling that Kent wants people to believe. Kent just wants to fan flames and get people thinking that the current executive administration is out to kill us all financially. It’s just not based upon facts.

        Besides… Congress has 1,000x more control over what happens to our tax structure than any president ever has. It’s not that the U.S. President has zero control. It’s just that he has much, much less control over our taxes than most people think. It’s just one of the realities of Washington D.C. that most people don’t want to agree with — no matter what party you support.

        1. And let’s add one more thing. Capital gains only happen when you sell securities. Hold onto them and there are no capital gains. Moral here, don’t rush to sell.

    2. @Kent
      What crap. Lucas sold because he is getting old and wants to retire. If I recall correctly, he mentioned that he is extremely rich and doesn’t need any more money.
      Also making such inane comments like ‘… jobs are axed from companies try desperately to survive the government which hates them…’ really kills any credibility you have. Do you think ANY political party hates, actually HATES companies? Even socialist governments (and don’t label the Dems as communists or socialist, that ship has sailed) know that industry is essential to any country’s future.

  4. It’s about sentiment. And part of sentiment is the sentiment of its consumer base – not just the fan base – and it has to be seen as delivering value. Recently its been seen, rightly or wrongly, as maximising margins (+40%) in an industry more used to working on 10%.
    Perhaps if accessories weren’t so eye-wateringly expensive – especially those required by long standing customers forced into an upgrade by software imposed limitations or hardware socket & adapter changes etc.

  5. “What’s driving Apple share prices lower and when will it stop?”

    What is driving Apple share prices down? Simple: unavailable products. The 64GB, black iPhone 5 has been “shipping” for well over a month. However, it’s still backlogged 3-4 weeks. May other recent product announcements are the same or worse. (Think of the 27″ iMac that was recently announce but won’t ship until December! Extremely few people who want a 27″ iMac are buying them now. Some will pre-order — ONCE THEY START TAKING PRE-ORDERS! Most will wait until their truly available. Right now Apple is selling virtually zero iMacs.)

    Once Apple gets its product line really out there (stock actually sitting in stores for virtually all models) then the news of how many of these things Apple can really sell will break. People (even dumb witted analysts) will understand that there has been a huge, pent up demand for these products.

    IF (and that is a truly HUGE IF at this point) Apple fixes *all* its supply problems before Thanksgiving in the U.S. then this quarter (fourth calendar quarter) will be absolutely huge. It may even dwarf the best previous by a factor of two. Then by the end of January 2013 the stock will not only bounce back, but possibly go beyond $800 a share.

    If Apple does not get its act together and have all its products really and truly available for immediate purchase, the stock price will sit in the doldrums for many, many more months.

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