Apple stock closes down 4.15% in largest point drop plunge

Posted:
in AAPL Investors edited January 2014


Apple stock has shifted downward dramatically over the last week, falling from a 52 week high of 644 down to close at 580 today. Today's drop amounted to $25.10, which appeared to be its largest single point drop.



Apple's share price is still high for the year, having fallen only back down to prices last seen in the middle of March. The company's stock rapidly and steadily appreciated from $411 at the beginning of January, surging on the news of the company's spectacular winter quarter sales.









Some reports attributed the drop to rumors initiated by BITG Research analyst Walter Piecyk, who went against the grain last week in issuing a downgrade on the company based on fears that mobile carriers would begin refusing to pay top subsidies to carry the iPhone.



Piecyk wrote that mobile carriers have "offered generous upgrade policies including some that enabled a fully subsidized phone upgrade only one year in to a two year contract," but warned, "We expect those policies to change as the faster upgrade rate of smartphones compared to legacy feature phones has been a costly surprise to post-paid and pre-paid operators, alike."



As a result, Piecyk predicted a worldwide drop in Apple's iPhone sales of 27.5 million units in the company's fiscal quarter third quarter, "resulting in a revenue estimate that is $1 billion below consensus.”



"Of course, our thesis will not be supported in the current quarter as the pent up demand in China and the launch of the iPhone in 30 additional markets is likely to drive strong sales that will offset the sequential declines in other markets," the analyst wrote.



Carriers have made changes to their boost short term profits after paying Apple industry leading upfront subsidies and guaranteeing minimum iPhone sales with prepaid blocks of orders. Verizon Wireless, for example, has instituted a new $30 fee for upgrading, a move that appears intended to recapture profits from its existing Android users who want to upgrade to an iPhone.



However, a sales collapse due to new carrier fees has not occured in the face of previous efforts by carriers to protect their bottom line with even more expensive early termination fees and other charges targeted at iPhone buyers.



Additionally, there's nothing new about predicting that Apple might lose ground with lower carrier subsidies. Last year, James Ratcliffe, an analyst at Barclays, warned of virtually the same thing, predicting that Verizon would only sell 9 million iPhones in 2011 and AT&T would only sell 6 million, due in part to cuts in carrier subsidies that would make iPhones appear to be more expensive.



In reality, AT&T sold 9.4 million iPhones just in the fourth calendar quarter of 2011, and Verizon sold 4.3 million in the same quarter. Neither carrier has cut its iPhone subsidies, even as Sprint and a variety of new carriers have joined Apple in selling iPhones in the US.



Additionally, Apple is widely expected by analysts to sell 30-37 million iPhones in the current quarter, nearly as many as it did in its blockbuster winter quarter. American carriers have not signaled any intention of cutting their iPhone subsidies, and internationally many carriers sell iPhones at full price. Apple also sells iPad, iPod and Mac products that aren't affected by carrier subsidies and make up roughly half of its business.



[ View article on AppleInsider ]

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Comments

  • Reply 1 of 78
    Just to remind the clown who doubted what I was saying...



    http://forums.appleinsider.com/showp...8&postcount=31
  • Reply 2 of 78
    zarenzaren Posts: 49member
    Buying opportunity!
  • Reply 3 of 78
    Quote:
    Originally Posted by island hermit View Post


    Just to remind the clown who doubted what I was saying...



    http://forums.appleinsider.com/showp...8&postcount=31



  • Reply 4 of 78
    Quote:
    Originally Posted by island hermit View Post


    Just to remind the clown who doubted what I was saying...



    http://forums.appleinsider.com/showp...8&postcount=31





    Nice!
  • Reply 5 of 78
    rogifanrogifan Posts: 10,669member
    Profit taking before earnings release. Nothing to see here, move on.
  • Reply 6 of 78
    songemusongemu Posts: 11member
    Analysts are useless.
  • Reply 7 of 78
    Quote:
    Originally Posted by Rogifan View Post


    Profit taking before earnings release. Nothing to see here, move on.



    Hmmm... profit taking didn't occur during the last release.
  • Reply 8 of 78
    If Microsoft dropped that much it would be 5 bucks a share.
  • Reply 9 of 78
    Quote:
    Originally Posted by Wheat Thins View Post


    If Microsoft dropped that much it would be 5 bucks a share.



    Give it time...





    j/k
  • Reply 10 of 78
    softekysofteky Posts: 136member
    Wasn't Thursday/Friday/Monday the biannual options week sell off where fund shares must be sold off and then repurchased as required by the fund mandates?



    Or am I mixing stuff up here?
  • Reply 11 of 78
    I stopped reading at "analyst"
  • Reply 12 of 78
    apple ][apple ][ Posts: 9,233member
    I've been reading some explanations as to the causes and possible reasons behind AAPL's five day in a row drop, and most of them seem like complete made up BS, IMO. Some news articles are blaming some minor piece of bad news, without providing any evidence linking the two or explaining the logic behind their claims. There hasn't really been any major negative news about Apple that would cause such a sell off, not even close to it. There's always the usual doom and gloom news about Apple, practically 365 days a year. And sometimes that news is even based on complete fabrications, such as the false stories and lies spread about Apple and Foxconn by some obese guy, whose name escapes me at the moment, but I can't be bothered to look up that loser's name on Google.



    I'm pretty new to the stock market, but I have my own opinion about this matter, and I believe that the selloff might be a combination of things:



    (1) A completely natural correction since AAPL has climbed rather quickly recently. It was obviously not going to continue to rise like that forever.

    (2) Large institutions selling off and possibly trying to manipulate the market ahead of earnings next week.

    (3) Panicky retail investors and average Joes who get shaken out of the market. People without balls should not be in the stock market. The stock market is not for pussies.

    (4) Sales caused by computerized trigger points.

    (5) The general state of things globally, with economic worries in Europe etc.



    AAPL will begin to climb again soon. Exactly when is anybody's guess. Next week's earnings should be interesting.
  • Reply 13 of 78
    macxpressmacxpress Posts: 5,808member
    Quote:
    Originally Posted by island hermit View Post


    Just to remind the clown who doubted what I was saying...



    http://forums.appleinsider.com/showp...8&postcount=31



    The sun shines on a dogs @ss every once in a while...
  • Reply 14 of 78
    Quote:
    Originally Posted by macxpress View Post


    The sun shines on a dogs @ss every once in a while...



    The other guy was going after me fairly hard for the simple thing I was saying. He didn't even have the balls to place a non monetary bet with me.



    He deserves the moniker I gave to him...



    ... and this dog's ass is very tanned.
  • Reply 15 of 78
    A new analyst, same old game. Talk it down. Buy it lower, sell it higher. Bet this analyst makes a market in AAPL. He's likely in the options business and had to force AAPL down to make his profit or not take a loss, depending on whether this was a call or put.
  • Reply 16 of 78
    shogunshogun Posts: 362member
    Here's why. Aapl went up and up and up to about 625-635. It tried at least three times, maybe four to rise higher. It proved it couldn't. Folks reasoned that if it couldn't go up and stay up any longer then it would be flat to sinking. So they decided to sell and lock in earnings.



    That was my impulse, but of course I didn't sell. Because I'm an amateur and nver can get myself to follow those impulses. But the pros can. Now they'll test it down until it can't stay down any longer... And I'll mistime getting in again, but will pick it up in time to make my standard $500.
  • Reply 17 of 78
    big kcbig kc Posts: 141member
    Quote:
    Originally Posted by island hermit View Post


    Just to remind the clown who doubted what I was saying...



    http://forums.appleinsider.com/showp...8&postcount=31



  • Reply 18 of 78
    charlitunacharlituna Posts: 7,217member
    Quote:
    Originally Posted by Apple ][ View Post


    .

    (5) The general state of things globally, with economic worries in Europe etc.




    This is something that is rarely mentioned. What is the state of the market in general. If it is going up but Apple down, then I might worry. But if it is all going down, not so much



    Combine this with the recent hyperbolic mostly FUD over the sudden 'flood' of Mac viruses and the supply issues with the iPad. Plus the lack of computer updates that 'should have happened by now' and it spells a drop. Not the first time, not likely to be the last
  • Reply 19 of 78
    Quote:
    Originally Posted by island hermit View Post


    Just to remind the clown who doubted what I was saying...



    http://forums.appleinsider.com/showp...8&postcount=31



    Quote:
    Originally Posted by macxpress View Post


    The sun shines on a dogs @ss every once in a while...



    Or a broken clock will be right twice a day.



    To island hermit: next time you have some stock tips, please let me know. I have some money that I'm looking to invest and seeing you predicted this you should be able to predict other changes as well. Let's get rich together.
  • Reply 20 of 78
    ric2ric2 Posts: 1member
    I am betting it is reluctant institutional selling. End of quarter and they have sell some shares to keep under their 5% holding rule. Stock price should rebound as soon as this selling is done.
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