The real reason why Apple stock is slumping

“For a company at the peak of its game, Apple sure had a dismal week,” Kevin Kelleher writes for PandoDaily. “The stock slumped 9 percent without any negative news, and in the midst of what could be its strongest quarter ever.”

MacDailyNews Take: This will be Apple’s strongest quarter ever. iCal us.

“In fact, Apple’s stock is down 24 percent since Sept. 21,” Kelleher writes. “Months after people started predicting Apple would be the first trillion-dollar company in the world, the stock’s market value is having trouble holding above $500 billion. That’s still a massive figure, but it’s also cheap: Apple’s price-earnings ratio of 12 is as low as it’s been in ten years.”

“What happened? That question is driving a lot of speculative theories about Apple. But the reality is, sad to say, much more mundane,” Kelleher writes. “Some stock-clearing firms were raising the loan deposits necessary to buy Apple shares on margin. That would not only decrease speculative demand for the stock, it could prompt investors to sell shares if they didn’t want to pay the extra deposit. But the reason for raising the margin requirement was telling: Clearing firms had a “high concentration” of Apple shares on margin – more shares in a single stock than they were comfortable with. And that gets to the real reason behind Apple’s stock blues. Its market cap had gotten just too freaking big. Fund managers don’t like having too high a percentage of their holdings in a single company, even if that company is Apple.”

Kelleher writes, “Of course, all this could change in a single day of trading if a critical mass of investors becomes convinced there is good news ahead. Some of the remaining Apple bulls defending the stock believe this could well happen.”

Read more in the full article here.

20 Comments

  1. Just more BS from ANAL…ysts. Apple stock is “worth more” than Amazon and Google stock, but the price the market puts on it is just a way to make money on it.

    While Amazon stock is “worth ” more than Apple stock, last quarter Amazon profit was -$274 Million. A LOSS,

    Apple made a profit last quarter of $ 6,600 Million and anal..ysts complained cause they thought Apple should have made more profit. But none complained about the Amazon loss.

    So, once again,, why is Apple stock slumping if its not market manipulators hard at work.????

    Just a thought,
    en

    1. Your response has ABSOLUTELY NOTHING to do with the quotes from the article mentioned here… About margin deposits being larger. That sounds like a reasonable theory for *part* of the stock slump.

  2. Buying will come on big time once the stock dips into fairy land low. Like back up the truck, sell grandma to raise capital to buy AAPL low. Maybe 485? 465?

    1. Apparently no one. Especially not the crooks running the Great Stock Market Casino. They’ve got the wool pulled over all the average investor’s eyes.

      It’s just human nature to try to figure out why someone you don’t know is kicking the crap out of you for apparently no reason at all. You think to yourself if you can figure out what’s going on, you might be able to change things for the better. You might even start imploring to a god you’ve never seen or believed in to make things right for you.

      You hear that, Sky Daddy? Why the heck are those hedge fund crooks making Amazon and Google appear more valuable than Apple? Please give me a sign if I’m right in sticking with Apple. So far, I haven’t gotten a single logical sign but I’m still trying.

  3. Possibly… but how about something even simpler, some general profit taking ahead of the uncertainty of the “fiscal cliff” and the prospect of much higher US taxation of investment gains next year? I have noted a series of reports of a number of senior Apple figures cashing in parts of their holdings in the last few months. Let’s face it Apple shares are still 30% up over the last twelve months.

    1. So, for instance, you’d even be satisfied even if Apple was up only 20% over the last twelve months while Amazon is up 30% while losing money. Yeah, sure. Tell me another one. If that’s the case I might as well just go to Las Vegas on put all my money on red and tell all analysts to quit their useless profession because company fundamentals don’t seem to matter anymore.

  4. So the reasoning is… Some investor spread out their money evenly among multiple companies. Apple has done so well, that particular investment is now dominating all the other investments. So the smart thing to do is to dump the Apple stock?

  5. Could we just rename this site “AAPL Daily News” and be done with it? I swear, half the stories on this site are about the stock.

    (And yeah, I know I don’t have to read the stories, and I don’t. It just seems like that’s the focus of MDN these days, which is weird, because “Mac enthusiast” =/= “AAPL investor”.)

    ——RM

  6. There is: The real reason why Apple stock is slumping

    Two years was expected the magic iphone5. In waiting for THE MAGIC Wall Street smelled the golden goose-, creating of this the most powerful financial pyramid. With obedient media experts and pouring some funds in Apple-stock, raised the share price doubled to 705 dollars without a related product, but only naked ‘waiting for THE MAGIC’.
    No one even ‘magical’ product can lift the shares upon its release as much, as the expectation of magical PRODUCT. With the help of the human imagination, that is limitless . But the time to come out iphone5 has come, and it come . Really very good phone (as good, as can be smartphone with iOS on , of course) BUT IT WAS NOT MAGIC at all.And not covering with its presence, fabulous price per share, which were pumped by the dodgers.
    Wall Street knew that it is a bubble, and can not last forever, unlike the izombies, small speculators and other muggins. Wall Street and the funds used the exact time of the release of iphone5 to begin sales of shares. Because they know that zombies and the speculators are buying then. Clever and surprising – right? So Wall Street make the media and ‘experts’ to repeat daily mantra: “Stocks fell, it’s time to buy,” And they fell every day and every day the muggins bought ! LOL Guess who was actually selling shares from $ 705 to $ 550?? That’s right, not zombies or small speculators. They all burned! But the Big Guys feel good now. The stock price will get normal. Of course the Apple’s share price will be higher than the last years price , because they sell better, but not as insane as it was.

  7. MDN take: “This will be Apple’s strongest quarter ever. ”

    Yeah, that’s my expectation too. I converted one sister to Apple last year – she replaced a failing HP desktop with an iMac. Her husband more recently replaced his Android cell phone with an iPhone, and she got one for herself. She tells me the Apple Store near Boca recently doubled its size and with the holidays it’s *still* crowded.

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