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Apple Stock Tanks: Biggest Drop in Seven Years

" ... I just want someone to hold me ..."

Consider yourself held ... Mmmmmm woof ... :eek:

" ... I agree with Phil A, Apple will dip below $100 ..."

Did that ! DOW now headed back up ... ~-300 down from open, hit a bottom close to ~790, momentarily, then reversed ... (Tomorrow the DOW will "fill the gap" to ~ +300 (~10,300), then it may do it all over again and head back down ... or not.)

" ... unless Apple makes changes to their pricing structure they'll have a hard time moving product this holiday season. ..."

That's right, cut and run ...

I'll predict that if Apple lowers prices across the board, the stock and the whole quality of the Apple product line will suffer a perceived reduction in quality and service. Following Michael Dell down that garden path would be a disaster for Apple and the whole high technology industry in general ... IMOP.

I would say, raise prices on those items that need it to stay profitable (considering the drop in the value of the $$ v. Euro exchange rates) and hold firm on the rest.

In times of economic stress, increasing margins to stay on top is always the better course.

(Nervous Nellys need not apply: We will be raising prices through out this month on our entire catalog because, face it, the dollar is being inflated dramatically and our off shore suppliers demand it. Today, I put several fat checks in the bank, received POs that will make this month a banner month and have quotations in process that will finish the year as the best we have ever had. We are NOT in the real estate business and will not be buying any until fall of 2009, but I will be buying more gold [US$810 per and steady]. Our business is up and I would bet that most of yours is as well.)
 
FastEddy said:
I'll predict that if Apple lowers prices across the board, the stock and the whole quality of the Apple product line will suffer a perceived reduction in quality and service. Following Michael Dell down that garden path would be a disaster for Apple and the whole high technology industry in general ... IMOP.
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I would disagree. The market has been pricing down Apple's stock because they anticipate a unit slowdown. The market knows that Apple has over $18 Billion cash on their balance sheet thus margins are not a concern. What's more of a concern is the firm's ability to move product in the current economic environment. A price reduction will alleviate some of the concerns and in my view, would be a positive for the stock. The stock should rise on any such news.
 
How would I even go about buying shares in Apple, and where? I'm based in the UK and want it as simple as possible. :p
 
amac4me said:
I would disagree.What's more of a concern is the firm's ability to move product in the current economic environment. A price reduction will alleviate some of the concerns and in my view, would be a positive for the stock. The stock should rise on any such news.
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You forget that a basic human modus operandi in the dire times is that the people buy less, but they tend to buy better "quality".
They buy stuff that has longevity,is well made and has that small touch of luxury.
Unless you are totally,totally hosed and living in a cardboard box,of course...


Apples mission now during the hard times is to weather it out in the best possible way and exploit the other companies that are loosing ground.
That is best done with aggressive marketing, not by cutting prices (dramatically).
 
amac4me: " .. The market has been pricing down Apple's stock because they anticipate a unit slowdown. The market knows that Apple has over $18 Billion cash on their balance sheet thus margins are not a concern. ... The stock should rise on any such news. ... "

Just to quibble a bit: The Market does not "know" anything. The market mavens and market manipulators and market customers may "know" something. Often the majority of these folks extrapolate from the larger picture to the smaller view, in this case, they might believe that the markets are in the toilet, so Apple should be too.

This is of course a basic error in symbolic logic assumptions, and certainly wrong in the case of Apple ... a hasty generalization based in insufficient evidence.

BUT what I may say here or the conclusion you or any pundit or market maven or broker or stock tout or investor / customer may come to ... Has nothing at all with what the markets may "think" or how the markets may "act" or what the markets may "do".

You are absolutely correct: Apple has huge cash reserves, as you say upwards of US$18 Billion big fat 'Merican Dollars. :apple:

Unfortunately, most investors, most brokers, most market mavens, touts and pundits will completely ignore this ... and continue to buy and sell based on uncertainty, based of well informed guesses and just plain old gut feelings.

I still say: Keep the Faith = Apple will have a banner year (again), even in the throws of a pending recession, even in the throws of a melt down of markets.

As for a change of prices of Apple products = never happen ... and in my opinion should not happen. Of course the introduction of a less expensive NanoPod or NoteBook ... well, Apple has already accounted for profitability verses costs in all those decisions ... so don't hold your breath for that $500 Apple LapTop or that $50 iPhone. ... And I believe that we should look at Apple stock prices at todays numbers as a "bottom".

If I were suggesting to The Steve or The Al that "if something needs to be done", then maybe Apple should go ahead and split the stock two for one as planned, now ... and use some of that "free cash" to buy back some of the stock ... :p

=====

" ... I'm based in the UK and want it as simple as possible. ..."

Ask your broker in London: There are Apple "ADR type" listings on all European markets, Footsey and DAX, etc. ... Although considering today's situation, I would advise buying gold in Swiss Francs as the Euro is about to take a well deserved dump.
 
I'm sitting here musing to myself, "should I point out the futility of market predictions to these poor lost souls?"

I've decided to stay out of it.

But hey, if any of the "market geniuses" in this thread posting buy/sell advice and predictions feel charitable, perhaps they could lend a hand to the U.S. and European governments, cause they sure could use some sage advice.

/sarcasm
 
Apple has already lowered the quality of their newest products, now they have to bring the prices down to match that quality.
 
AppliedMicro said:
Why?

Exiting the market costs nearly nothing.
Click to expand...

Because you will realise a loss, whereas at present, by holding any position you have, you will in due time return to positive equity [subject to the share price appreciating].

However, there is a financial cost in not enjoying the liquidity selling may release, but I guess it will be less than the present losses you could realise.
 
Not to pile on

but Cramer (who is not someone I trust) did have an interesting chart of tech stocks and how fell they far from their peak during the 2000-2003 correction. Apple was down 90% and the whole way down people were saying now is the time to get in. Sounds familiar . . .even to me. I bought in at just under 105 last week and thought I was brilliant. . .

Closed today at 89 and if 2000-2003 was any get (it may not be) we could be in for a bottom in the 40s. . .
 
Adamo said:
How would I even go about buying shares in Apple, and where? I'm based in the UK and want it as simple as possible. :p
Click to expand...

Register on line with Self Trade then fill in the USA tax exempt form. It will take about 5 days to transfer money in to your Self Trade account and then it will cost you £12.50 per trade. I think - check it all out for yourself obviously.
 
PeckhamBog said:
Because you will realise a loss
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Yeah... but what's wrong about that? If the market performs as badly that you don't want to get in, then why stay in it anymore? I mean... Why would you not want to get in the market nowadays? It's simple: Because you see "too much" downside potential. But if you do that, you not only might just as well want to get out. No, you should!

It doesn't matter if you "realise" a loss, or not.

A loss is a loss is a loss.

Whether you realise it or not is irrelevant. Sure, I know many Joe Average investors who feel they should stick to an losing investment they've made cause "the price ought to go up some day" and refuse to sell for less than the price they paid. And quite frankly, I've had and still occasionally have these thoughts as well. But that doesn't change a thing about the fact that this behaviour is totally irrational.

PeckhamBog said:
you will in due time return to positive equity [subject to the share price appreciating].
Click to expand...
So you can and will if you exit now and return later.

PeckhamBog said:
However, there is a financial cost in not enjoying the liquidity selling may release, but I guess it will be less than the present losses you could realise.
Click to expand...
You can and should completely forget about the initial price you paid. OK, it is not totally useless for assessing your investment behaviour and success and there may be some secondary effects attached to it (taxation), but generally you should not take it into account at all when making decisions - like the one if to stay in or exit the market.

Your losses are all factored in today. Cause you cannot get more for your Apple stock today than it is worth today (on the stock exchange basically). All that should matter in investment decisions is your assessment of market conditions and trends and transaction costs.

I don't know what someone else's transaction costs are. For instance, my online broker charges 0,25% plus a few cents for buying and selling stocks. If I sell my Apple stock or whatever today and buy it back later, that's just 0,5% for a "round trip". Slightly more or less if prices change.

Right now, markets are spinning out of control. For instance, German behemoth Volkswagen was up more than 50% intraday (!) yesterday but closed with a loss for the day. You might appreciate this as a golden trading opportunity, or you might consider it too risqué to enter the market.

Whatever... but is a mere 0,5% or maybe 1% in costs the entire difference that it takes, for somebody to stay in a market which he wouldn't be willing to enter at all, otherwise? This strikes me as highly irrational.

(I'm assuming one has bought plain AAPL stock and isn't bound by some contracts or "penalties".
Oh, and please excuse the bad English. I'm a bit tired and need to get some sleep)
 
acrafton said:
but Cramer (who is not someone I trust) did have an interesting chart of tech stocks and how fell they far from their peak during the 2000-2003 correction. Apple was down 90% and the whole way down people were saying now is the time to get in. Sounds familiar . . .even to me. I bought in at just under 105 last week and thought I was brilliant. . .

Closed today at 89 and if 2000-2003 was any get (it may not be) we could be in for a bottom in the 40s. . .
Click to expand...
Not saying a bottom of $40 isn't possible but that would put APPL's P/E @ ~ 7.8. When was the last time APPL had a P/E that low.:eek:

Also, that would put the value of APPL's outstanding stock @ ~ 35 billion and with a cash reserve approaching ~20 billion this would be shades of the dismal days when APPL was @ $12 a share and on the brink. At $40/share, I'd liquidate everything I own and would buy.
 
For Apple to bottom at 40, they would need ti discount the $20/Share in CASH in the bank, meaning it is valued more at $20.

For Apple to be valued at $20/Share, you'd have to believe Apple will not only stop growing, but market share will shrink and the company is basically spiralling to nothing.
If it gets to 40, and Steve Jobs isn't dead, buy buy buy.
 
Interesting related article on CNBC...

Apple as Wall Street Whipping Boy

Apple Inc. is fast becoming the poster boy for all things that are wrong with Wall Street right now, and that in itself might represent an opportunity for the savvy investor willing to play the odds instead of curling up in a ball and letting traders kick them in the head over and over again...
Click to expand...

Continued here: http://www.cnbc.com/id/27085733
 
rickag said:
Also, that would put the value of APPL's outstanding stock @ ~ 35 billion and with a cash reserve approaching ~20 billion...
Click to expand...

I had a read through AAPL's balance sheet and saw nothing that said they had 20B CASH in the bank.

They have 9B in cash and equivalents (money market funds I assume) and 11B in short term investments (bonds I assume). In fact, equity (thats assets - liabilities) is only 19B.

OK, money market funds are in trouble, so too are bonds...so is that 20B really 20B, is it liquid? Its not a bad thing to have the cash sure, but its also not a reason to invest in a company whose entire product line is aimed at discretionary consumer spending...

That "cash in the bank" is about 22 dollars per share, make your price target a little above that and see what happens. Think its not possible? Forget rational markets, there are plenty of forced sellers out there who need cash NOW and don't really care about AAPL and its "cash in the bank".

30 dollars, thats my target.
 
" ... I'm sitting here musing to myself, "should I point out the futility of market predictions to these poor lost souls?" ..."

Mmmmm ... imagine how a clueless government regulator must feel. :confused:

" ... I had a read through AAPL's balance sheet and saw nothing that said they had 20B CASH in the bank. ... They have 9B in cash and equivalents (money market funds I assume) and 11B in short term investments (bonds I assume) ..."

Your guess is as good as any. Apple certainly does have a pile of cash ... How big? (Others here suggested that $20B. Your number $9B is probably much closer to the mark, but that may be 90 days old. It could be greater or lesser now, but still substantial even compared to the number of shares outstanding.)

One of my rules about trusting company reports is: If that Board of Directors is so smart, how much of the stock do they own? And of course everyone knows that the Apple Board is made up of genuine stockholders ... with their own money right where their mouth is. (If they don't want any, I don't want any either.) :D

Steve J. owns how many shares? And takes his pay in the form of more shares, right? = a good sign, probably the best sign that Apple's numbers are correct and GAAP sound and sure. :cool:
 
My first experience with the stock market:

I bought five shares of AAPL stock two days ago, at 88.87 - I'm assuming the stock goes up after apple announces new products (or cheaper manufacturing processes etc. like the rumored "brick".) Really hoping apple announces the new macbooks so I can gain something out of this...
 
merrymoon said:
My first experience with the stock market:

I bought five shares of AAPL stock two days ago, at 88.87 - I'm assuming the stock goes up after apple announces new products (or cheaper manufacturing processes etc. like the rumored "brick".) Really hoping apple announces the new macbooks so I can gain something out of this...
Click to expand...

Well it depends how short you are in. I have been debating the same move you have taken, but it could be a couple months before it goes back up. Remember that the stock price tanks after new announcements and earnings reports. Just the way it is.

If you really need to turn it around you are going to have to trade it during the middle of the day, when its up to ~95 ish.
 
trule said:
That "cash in the bank" is about 22 dollars per share, make your price target a little above that and see what happens.
30 dollars, thats my target.
Click to expand...
How is that supposed to happen?
Essentially, you'd be paying 22$ per share for 22$ of cash per share - and 8$ per share for the rest of the company. Which, by the way, will earn a projected 5$ - 6$ per share this year alone. I am not going to rule anything out anymore, but this is really outrageously cheap and cannot be justified by fundamentals. We're only going to see prices below 40$ due to technical reaction as a result of weird trading.

But still... in Apple's case I believe were going to see big, big buyers at some point, if the price declines any further.
 
when apple switches the interest from making computers to iPhone and iPod. I just can't help but think maybe that is one of the reason why.
 
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