Apple Shares Drop 5%

[CubaTBird]

http://www.macobserver.com/stockwatch/2005/03/08.2.shtml

Shares of Apple Computer dropped 5.2% Tuesday on worries that Sony's new flash memory-based music players could take a bite out of Apple's iPod empire. Sony announced new low-cost music players today in its Walkman product line that are designed to compete with Apple's iPod shuffle.


While the new Walkman models are slightly more expensive than their iPod shuffle counterparts (see TMO's full coverage for more information), Sony included support for the MP3 format for the first time. Industry watchers have seen this as critical for Sony to be able to gain significant traction in the market because of the dominance of MP3 in the digital music sphere. :eek:

[Dont Hurt Me]

You know that wasnt it, it was those Doom3 scores that lowered that stock. :eek:

[virividox]

its about time that apple shares dropped anyway, their share price is very inflated

[Phobophobia]

Long and proud.

[Blackheart]

Time to buy more! :D

[Daveway]

Arg!! The Pain!! :eek: :mad:
I've been kinda depressed all day about it. :(

[Mr. Durden]

This is it. We've been hearing how Apple is doomed and on the verge of closing their doors permanantly... this is it. So long Apple, been nice knowing you. :rolleyes:

(Just is case you couldnt tell, that was dripping with sarcasm)

[quackattack]

No worries, they will bounce back up when Tiger and 5G iPods are announced :D ;)

[jer446]

why does this happen to me lol? i bought apple stock a couple of days ago..

[mj_1903]

why does this happen to me lol? i bought apple stock a couple of days ago..

Don't worry about it, the price will climb back up again shortly. This is just a little bit of profit taking. :)

[RandomDeadHead]

Time to update the iMacs and Powermacs. Just the kick we need.

[Yvan256]

why does this happen to me lol? i bought apple stock a couple of days ago..

I bought at 44.60$, I feel your pain...

[Lacero]

Apple stock is currently overvalued. It's being corrected.

[Hoef]

Apple stock is currently overvalued. It's being corrected.

Really? What do you think is the right price?

[wide]

This has been happening since the stock touched the $60 price range.

[hob]

I bought at 44.60$, I feel your pain...
Surely now is the worst time ever to buy... well not NOW but when YOU did... cos Apple stock is at the highest it's EVER been! If it fell to about 30 points I'd invest heavily...

[runninmac]

I bought at 44.60$, I feel your pain...

I feel everyones pain i bought it 4 cents higher, $44.64!

[Bibulous]

sell



no wait buy



no sell



buy low, sell high or something...

[Savage Henry]

sell


no wait buy


no sell


buy low, sell high or something...In a kind of empty pre-coffee deluge morning way, that made me laugh. Thanks for that.:)

I too believe that the price has reached a pretty astounding peak and doubt it will make any further sky reaching climbs beyond normal market patterns. The last 12 months has seen Apple release a slew of new products, most of which pretty damn good. However, from now on I can't see anything other than the upgrading of the current lines in the next 12 months, and that kinda progress don't get them share prices rocketing.

Just mho ..... shares prices may go up as well as down.

[tristan]

If you can't read a financial statement, then you shouldn't own stock.

And if you can read a financial statement, then what are you doing buying Apple stock? :-)

Seriously, Apple is actually starting to be a company with some decent earnings, which is good, but you can definitely argue that the stock price has moved ahead of those earnings.

[quackattack]

Really? What do you think is the right price?

Well, Apples stated net worth is around $7 a share..... thats probably a little generous, gererally they probably have about $10 in net assets. Of course this doesn't factor in earnings.....

Apple is trading at around 32 times its projected earnings... but before you panic realize that other tech companies trade trade with a high P/E ratio Dell is around 23 I think.

Even still Apple has great potential, so this may not be out of the question. Valuing stocks is a tricky business. But with Apple I think if you settle in for a while, we will see some more upward motion. We just need to be patient as it digests some of the recent rises in price.

[virividox]

apple has no debt, which helps make its stock price high

but its really a lot of hype, their profits cant justify their high stock price. if u have their stock now and bought when it was low, good for you :) but buying now, eh seems kinda like your just jumping on the bandwagon and i dont think that bandwagon is going that much furhter

[Chappers]

The Sony players look like something for Barbie.

[quackattack]

The Sony players look like something for Barbie.

Actually there is another model that looks very cool.

http://www.sonystyle.com/intershoproot/eCS/Store/en/imagesProducts/jump_pages/flashplayer/images/nwe405.jpg

Shuffle with a screen! Apple better take note. Too bad it won't take AAC.

[agentmouthwash]

I hope Apple are paying attention to what's going on.
On the subway the other day I watched about 6 people
drool over this person's orange creative zen micro.
They were all talking about napster-to-go and how
people are selling their ipods on ebay for these
new units that have FM radio, audioin and longer battery.
One kid was saying how the new ipod mini colors are
so 80's and flourescent and the zen has more choices
and are cooler.
The whole thing made me sad.

[Kato C.]

It's had a great run. As others have said, on an earnings basis, it is tough to justify its price. Arithmetically, there is huge growth built into the stock price. It needs a breather.

[tristan]

No no - you can't say Apple stock is worth $7.

Basically in order to support a share price of, say, $50, that means that earnings per share would have to be $3 or $4. Not this year, not next year, but within a few of years. Analyst EPS expectations for Apple in '06 are $1.05 for the current year, and $1.25 next year. So the company's got a ways to go.

But no way you can say that Apple's just worth $7 if it's generating $1.25 a share with an estimated 10% growth a year. It would be worth at least $25 minimum.

Nice to put my $50k MBA to some use. :-)

[goodwill]

do you guys remember like 9 months ago when we were all making fun of that guy when apples stock was at 26.50 and he was like, you better buy apple stock now because it will shoot through the roof? Then it went up like 3 bucks and he was like, Im telling you, buy it now. Then we were like, shutup, it might go up 2 more bucks, but shut your trap. Then 9 months later, here we are now talking about Apples stock being down 5 percent after it tripled in price initially. I bet that guy is off in Tahiti right now while we're still paying off bills, mortgages, insurance and car notes. Life's just great.

[tristan]

Knowing when to buy is a lot easier than knowing when to sell though. He might hold on to the stock for years and ride it back down to 28 - or maybe he already sold when it hit 35 and he's kicking himself.

[quackattack]

No no - you can't say Apple stock is worth $7.

Basically in order to support a share price of, say, $50, that means that earnings per share would have to be $3 or $4. Not this year, not next year, but within a few of years. Analyst EPS expectations for Apple in '06 are $1.05 for the current year, and $1.25 next year. So the company's got a ways to go.

But no way you can say that Apple's just worth $7 if it's generating $1.25 a share with an estimated 10% growth a year. It would be worth at least $25 minimum.

Nice to put my $50k MBA to some use. :-)

I didn't say that Apple stock is worth $7. Not by a long shot.

I said STATED NET WORTH is about $7. This is straight off their balance sheet. Before the split liabilities were about $8, assets were $22 ($15 of which is cash and liquid investments). A-L=Net worth. About $14 a share. After a 2 for 1 stock split $7.

I am not even considering future earnings.

Hope I didn't create any confusion earlier. I was not making an attempt to value the stock in my earlier post.

Just putting my B.S. in Business Admin. to use :) :p

[Phobophobia]

This stock will do excellently later on in the year. Earnings people, companies are all about earnings.

[QCassidy352]

I hope Apple are paying attention to what's going on.
On the subway the other day I watched about 6 people
drool over this person's orange creative zen micro.
They were all talking about napster-to-go and how
people are selling their ipods on ebay for these
new units that have FM radio, audioin and longer battery.
One kid was saying how the new ipod mini colors are
so 80's and flourescent and the zen has more choices
and are cooler.
The whole thing made me sad.

I see more ipods all the time and have yet to see anyone with a creative zen micro... keep in mind that yours, like mine, is just one person's experience and doesn't really mean anything in terms of the larger tech market.

[andrewm]

i.e., just what I want, to hopefully make Apple's stock double:

A simultaneous release of
- Dual-core dual-processor 3.2 Ghz G5 PowerMacs with a built-in iPod dock for Pros on the Go (read two lines down)
- Mac OS X Tiger with a $99 upgrade for owners of Panther and a $119 upgrade for owners of Jaguar
- Next-generation iPods with a stylus and mini Mac OS X system--a new PDA for a new Generation
- An ongoing 'Widget of the Week' contest with free Stuff for winners like an iPod Shuffle or one of those missing Firewire cables

I'm having far too much fun here. Someone stop me before I say something unreasonable!

[Kato C.]

i.e., just what I want, to hopefully make Apple's stock double........
I'm having far too much fun here. Someone stop me before I say something unreasonable!
I think you just did. :D But you're having fun and that is the main thing. :cool:

[Kato C.]

But no way you can say that Apple's just worth $7 if it's generating $1.25 a share with an estimated 10% growth a year. It would be worth at least $25 minimum.
Nice to put my $50k MBA to some use. :-)
Great, I love MBA's. Calculator geeks. Bet you have a HP12C with Reverse Polish Notation.

So if 10% annual growth (or is that compounded annual) gets $25 per share. What is the implicit growth rate in eps built into the peak price that apple was trading at?

[tristan]

I'd say about 20-25%. For a rough estimate I take the forward P/E and subtract 10. That's not really the formula, but it's close enough. You can make the calc as lazy or as complex as you want.

I don't really look at stocks that way myself. My method is to forecast earnings three years out, and then try to guesstimate a reasonable PE. PE x earnings = stock price. Then I reduce about a third to give me a fair price for today. That tends to steer me to low P/E stocks like insurance, financials, and industrials, and out of tech, which is fine with me.