Shares of Apple tumbled in Friday trading, falling as much as 2.2% in the morning session. As of 03:36 p.m. EDT, the stock was still down 1.83%.
Danny Vena for The Motley Fool:
The broader market indexes were caught in a downdraft, which no doubt contributed to the iPhone maker’s slump. However, even as the tech giant fell, there were several reports that held positive news for the company — and shareholders.
Earlier this month, Apple announced the latest version of its popular earbuds, the second generation of the AirPods Pro. The earliest reviews of the fan-favorite devices are in — and users are raving.
CNET called them “the best small earbuds you can buy,” citing the improved sound, active noise cancelation, and better battery life, saying they “deliver exceptionally good performance for their size.” At the same time, TechCrunch said “you won’t want to take them out of your ears,” also applauding the better sound, active noise cancelation, transparency mode, and the case that supports wireless charging. These accolades came as AirPods hit stores today…
In perhaps even bigger news, the company has inked a multiyear deal with the National Football League, making Apple Music the new sponsor of the NFL Super Bowl halftime show. The centerpiece of the annual championship football game each February, the halftime show is an extravagant event known for hosting some of the biggest performers in the industry, making it a perfect showcase for Apple’s subscription music service.
MacDailyNews Take: Vena doesn’t mention a bit of even more recent positive news: the shift toward iPhone Pro models by the buying public which will make for a strong iPhone mix and, helpful to Apple and AAPL shareholders, a higher iPhone ASP!
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Stock Market 101: Wall Street doesn’t control, decide or “set” the price of a stock. Nor does it “reflect” the state of the economy, let alone the state of any company represented.
For example, the success of Apple (or lack thereof) has no direct effect on the price of Apple’s stock. Rather, when traders are (in general) more interested in selling it than buying it, the price of a stock declines. The opposite is also true.
If you “Play” the stock market (trade) you quickly discover the only way to make money on a rising stock is to be among the first to buy it (when it is still low). And the only way to avoid losing money on a declining stock is to be among the first to sell it (when it is still high). The net result, folks, is traders don’t watch the company behind the stock. They are watching each other. If a few start selling a stock, the rest rush to sell it, too. If they hear some news (or some analyst’s comments) that they think will cause other traders to react, they will try to be among the first to so react. Thus they become a self-fulfilling prophecy.
Investors, on the other hand, are interested in the company. They buy and hold for the long term. For them, it’s a savings account with (hopefully) a better return. But because of this, Investors don’t influence price changes in any way — until and unless they sell.
Wall Street is not smart, stupid or clueless. People who cry, “They just don’t understand Apple,” don’t understand the market. It’s a mob-mentality, pure & simple. They don’t care about you, me or Apple. They only care about each other and any “skill” they may have is nothing more than the ability to predict what other traders might do before they do it.
In other words, “traders” are like sheep… If a few suddenly start to run, they all run and in the same direction. Only afterward will “analysts” attempt to figure out why.
What’s the solution for Apple? Minimize their reliance/exposure to traders. So, you begin share buy-backs and bond issues – with an eye toward reducing your risk (from traders) or perhaps one day eliminating it! (Get out of the stock market and go private. All they’d really need is lots of money to fund themselves! Hmmm.)
I’ll get off my soap-box, now.
“Wall Street doesn’t control, decide or “set” the price of a stock. Nor does it “reflect” the state of the economy,”
To embrace there’s no relationship is naive. High debt in the econ can affect stocks…esp thse considered “risk-on” tech stocks. AAPL borrowed millions when interest rates were low (economy) to fund various things, including stock buy-backs, of which share price benefitted (stock market).
The reverse actions in both econ (higher int rates) are pressing on shares of many (stock mkt). To say otherwise is holding your formula too tightly.
Apple is most likely a safer bet then the USA economy as a whole. God forbid an emp or Russian nuke sends the USA economy into a flaming tailspin but if the unimaginable happens Apple is diversified across the globe and will most likely fair better then the rest of the homeland. So has the unpredictable market finds it’s way forward it’s a safe bet that Apple is the safest bet.