Apple Stock Down 10% in After Hours Trading Amidst Concerns of Flat Growth

MacRumors · Jan 23, 2013, 07:45 PM

After reporting record-breaking quarterly revenue and profit earlier today, Apple's stock has taken a 10% tumble in after hours trading. Apple posted a $13.1 billion profit for the quarter this year compared to a $13.06 billion profit in the same quarter of last year, yielding flat growth year over year.

The flat growth, as pointed out by Apple, is largely because manufacturing costs have risen, even as revenue has risen 18%. The New York Times notes that analysts were worried that about Apple's profit margins, even after Apple warned that a significant overhaul of its product line would mean high manufacturing costs in the early lives of the products.

Quote:

The results arrived with an unusual level of anticipation, even for a company as high-profile as Apple, because of anxiety among some investors about Apple's ability to sustain its growth and create new hit products. Apple's stock has lost about a quarter of its value since September, erasing more than $170 billion of its market value.

Business Insider notes that even though Apple's holiday quarter in 2012 had a week less than it did in 2011 that sales growth still wouldn't be at the point that it was.

Apple's 10% stock decline gives it a current market cap of $463.49 billion and a loss of nearly $50 billion in market capitalization from worried investors. Despite analysts' and investors' worries of year-over-year growth, The Wall Street Journal's Tom Gara notes that Apple's losses in market cap today were roughly equal the value of two Research in Motions and two Nokias.

Article Link: Apple Stock Down 10% in After Hours Trading Amidst Concerns of Flat Growth

shanmugam · Jan 23, 2013, 07:48 PM

no need to worry, it will be back up tomorrow around 10 or 1am

Moshe1010 · Jan 23, 2013, 07:48 PM

I knew I had to buy some put options

iphone495 · Jan 23, 2013, 07:51 PM

The Law of Large Numbers really does apply to EVERYTHING.

wiz329 · Jan 23, 2013, 08:27 PM

Quote:

Originally Posted by iphone495

The Law of Large Numbers really does apply to EVERYTHING.

Do you know what the law of large numbers is?

iphone495 · Jan 25, 2013, 09:09 AM

Quote:

Originally Posted by wiz329

Do you know what the law of large numbers is?

According to Investopedia, "When relating this concept to finance, it suggests that as a company grows, its chances of sustaining a large percentage in growth diminish. This is because as a company continues to expand, it must grow more and more just to maintain a constant percentage of growth."

Do YOU know what the law of large numbers is?

----------

Quote:

Originally Posted by iGrip

How does the law of large numbers apply to this situation?

"...the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed."

http://en.wikipedia.org/wiki/Law_of_large_numbers

According to Investopedia, "When relating this concept to finance, it suggests that as a company grows, its chances of sustaining a large percentage in growth diminish. This is because as a company continues to expand, it must grow more and more just to maintain a constant percentage of growth."

----------

Quote:

Originally Posted by TMar

Who trades at 1 am?

People with no life apparently.

iGrip · Jan 23, 2013, 09:44 PM

Quote:

Originally Posted by iphone495

The Law of Large Numbers really does apply to EVERYTHING.

How does the law of large numbers apply to this situation?

"...the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed."

http://en.wikipedia.org/wiki/Law_of_large_numbers

JAT · Jan 24, 2013, 12:10 PM

Quote:

Originally Posted by iGrip

How does the law of large numbers apply to this situation?

"...the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed."

http://en.wikipedia.org/wiki/Law_of_large_numbers

This is investing. The Law, for investing, is that you can't expect 50% growth forever, because as the numbers get larger it is impossible to keep up high growth levels. Some investors expected exponential growth in perpetuity from Apple. Not possible, and people shouldn't be this crazy because percentage growth slows. But it's the stock market, people are crazy.

It is adapted from the quote you listed for this industry.

TMar · Jan 23, 2013, 07:54 PM

Quote:

Originally Posted by shanmugam

no need to worry, it will be back up tomorrow around 10 or 1am

Who trades at 1 am?

Bubba Satori · Jan 23, 2013, 08:11 PM

Quote:

Originally Posted by TMar

Who trades at 1 am?

A few billion people in Asia.

MrDc2 · Jan 23, 2013, 08:32 PM

Quote:

Originally Posted by TMar

Who trades at 1 am?

Crack heads.

bawbac · Jan 24, 2013, 02:02 PM

Quote:

Originally Posted by shanmugam

no need to worry, it will be back up tomorrow around 10 or 1am

OUCH!

Apple Inc.
NASDAQ: AAPL - Jan 24 3:00pm ET
453.92

parapup · Jan 23, 2013, 07:51 PM

Apple is becoming Microsoft - or at least that's the fear. They sell a ton of their cash cow products and make good money - but that's just resting on their laurels. Where the hell is any innovation and disruption? People respect Apple for exactly that. Making profits on cash cows - that spot is for Microsoft.

The thing is they will sell some more iPads and iPhones but then when that's saturated they will badly need disruptive new product or at least leaps and bounds improvements to existing ones. And there are no winds of that for past couple years and counting.

adnbek · Jan 23, 2013, 08:10 PM

Quote:

Originally Posted by parapup

they will badly need disruptive new product or at least leaps and bounds improvements to existing ones. And there are no winds of that for past couple years and counting.

Past couple of years? iPhone (2007), MacBook Air (2010), iPad (2010)
Please define "couple" because as far I remember, these disruptive new products only came out a few years ago.

I guess attention spans have become so short nowadays that 2010 seems like an eternity ago.

1Alec1 · Jan 23, 2013, 08:16 PM

Quote:

Originally Posted by adnbek

Past couple of years? iPhone (2007), MacBook Air (2010), iPad (2010)
Please define "couple" because as far I remember, these disruptive new products only came out a few years ago.

I guess attention spans have become so short nowadays that 2010 seems like an eternity ago.

"couple" = 2

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Quote:

Originally Posted by mdlooker

So nothing's on the horizon that's causing great excitement which mean stocks will either stay where they are or drop more..am I right?

I need to learn more about this stuff.

You can't ever tell for sure unless you're an inside trader. In AAPL's case, if p''(t) is not greater than 0, there is a risk of analysts saying that Apple is doomed and causing selling. They're almost inside traders...

You can make money in the stock market without knowledge if you just pick the right companies based on instinct and hold them for a few years. I've actually pulled off day-trading with oil based on instinct somehow - it exploded like 40% in the weeks after I bought due to the Arab rebellions and dropped 15% the day after I sold. Not doing that again!

Squilly · Jan 23, 2013, 08:17 PM

Hmm. I wonder if its a good time to buy. I'll see tomorrow...

samcraig · Jan 23, 2013, 08:21 PM

Quote:

Originally Posted by 1Alec1

$350 seems highly unlikely, but if that's your target buy point, I can see why you like it when Apple does stuff wrong.

Based on my comment why would you say that? You have no idea what my history of purchases/sales are.

1Alec1 · 08:46 PM

Quote:

Originally Posted by samcraig

Based on my comment why would you say that? You have no idea what my history of purchases/sales are.

The history doesn't matter. Whatever price someone buys at is the price from which he expects the stock to go up, and whatever price someone does NOT buy at is the price from which he expects it to go down... in theory. Of course, people would only trade the stocks they're looking at, and trade commissions limit who can trade and when, but you're apparently monitoring AAPL, and I just have to assume that you're buying in enough quantity to overcome $20 in commission.

Michael Scrip · Jan 23, 2013, 08:27 PM

Quote:

Originally Posted by parapup

they will badly need disruptive new product or at least leaps and bounds improvements to existing ones. And there are no winds of that for past couple years and counting.

Let's take Apple out of the picture for a moment.

Who else can we count on to deliver all these disruptive new products?

Bubba Satori · Jan 23, 2013, 08:40 PM

Quote:

Originally Posted by Michael Scrip

Let's take Apple out of the picture for a moment.

Who else can we count on to deliver all these disruptive new products?

Rogifan · Jan 23, 2013, 08:42 PM

Quote:

Originally Posted by Bubba Satori

Image

Yeah man I can't wait to get my Google glasses.

flux73 · Jan 23, 2013, 09:47 PM

Quote:

Originally Posted by Rogifan

Yeah man I can't wait to get my Google glasses.

Google glasses will be about as popular as Bluetooth headsets. Actually, with a price point that is supposedly $1500, it's going to be a lot LESS popular. I'm sure they'll be cool to us geeks, but no one else. Google glasses are not going to disrupt anything.

JS82712 · Jan 23, 2013, 08:42 PM

Quote:

Originally Posted by Bubba Satori

Image

lol really? if it's so ground-breaking, google wouldn't have spent an hour of their keynote showing off this thing only taking videos and pictures.

Bubba Satori · Jan 23, 2013, 08:45 PM

I see I've ruffled some feathers.
That's never happened before.

Yet I was the only one to answer the question.
I'm a solutions kind of guy. I can't help myself.

1Alec1 · Jan 23, 2013, 08:47 PM

Quote:

Originally Posted by JS82712

lol really? if it's so ground-breaking, google wouldn't have spent an hour of their keynote showing off this thing only taking videos and pictures.

No, the picture refers to the man wearing the glasses, some random guy.

Jan 23, 2013, 07:48 PM	#2
shanmugam macrumors 68020 Join Date: Sep 2008 Location: Blazer town!	no need to worry, it will be back up tomorrow around 10 or 1am __________________ iPhone 5/4S\| iPad 4 \| iPad mini \| Nexus 7 \| Kindle Nov2012\| Mac Mini\| Core i7 2.3GHz QC \| 330 240GB USB 3 \| Viewsonic 21.5" 1920x1080 Sep2012\|Toshiba 14" \| i5 2.5Ghz 1366x768 \|Win 7 \| x-25M 120GB
	6

Jan 23, 2013, 07:51 PM	#13
parapup macrumors 65816 Join Date: Oct 2006	Apple is becoming Microsoft - or at least that's the fear. They sell a ton of their cash cow products and make good money - but that's just resting on their laurels. Where the hell is any innovation and disruption? People respect Apple for exactly that. Making profits on cash cows - that spot is for Microsoft. The thing is they will sell some more iPads and iPhones but then when that's saturated they will badly need disruptive new product or at least leaps and bounds improvements to existing ones. And there are no winds of that for past couple years and counting. __________________ 21" iMac(2011); 17" MBP(2010) ; ThinkPad x220; Galaxy Note II; Nexus 7
	29

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Jan 23, 2013, 07:48 PM	#3
Moshe1010 macrumors 6502a Join Date: Jun 2010	I knew I had to buy some put options
	2

Jan 23, 2013, 07:51 PM	#4
iphone495 macrumors member Join Date: Sep 2012	The Law of Large Numbers really does apply to EVERYTHING.
	5

Jan 23, 2013, 08:17 PM	#16
Squilly In Time-Out Join Date: Nov 2012 Location: PA	Hmm. I wonder if its a good time to buy. I'll see tomorrow...
	0

Jan 23, 2013, 08:45 PM	#24
Bubba Satori macrumors 68040 Join Date: Feb 2008 Location: B'ham	I see I've ruffled some feathers. That's never happened before. Yet I was the only one to answer the question. I'm a solutions kind of guy. I can't help myself.
	0