BY admin | November 17, 2012
It is a shock for many people to see Apple stock price plummeting so fast. From $705 it has come down to $527 and it is still falling
(NVONews.Com) Apple stock price is plummeting and plummeting fast. Every time its stock registers a fall, many people’s heart beats too sink with it. For, millions of people have invested their hard earned money on stock that was the ‘best’ bet to earn a handsome return at a time when all other stocks looked like a bad bargain. Cupertino based company’s stocks rose like nothing else, making it the biggest company in the USA and its stocks earning more than handsomely for people who could afford them.
Even people who didn’t have means to invest huge sums, still tried to invest something on a stock that everyone was sure will double in value within a few months’ time or a within a year as nobody wanted to miss the golden egg. People were counting on Apple products and they were sure in their minds that every new product will take Apple stock to at least $100 above its existing price. So iPhone 5 launch was expected to take it well around $750, iPad mini to beyond $800 and iPad 4th generation to at least beyond $900.
There were many prophecies from ‘experts’ in this regard. Piper Jaffray analyst Gene Munster earlier this year predicted Apple stock price to cross $1000 mark pretty soon. “We believe shares of Apple will reach $1,000 in CY14, which would imply a roughly 1 trillion dollar market cap, the first in history. While some investors believe the biggest issue for Apple to get to $1,000 is the market cap along with excessive investor exuberance, which we address in this note, we believe the real story is earnings growth. Fundamentally, we believe shares can reach $1,000 based on our belief Apple will continue to win in global mobile devices. As a result, we remain confident in our $80.18 CY15 estimate. A 12x multiple (stock’s current out year EPS multiple) on our CY15 EPS of $80.18 yields $960; however, this excludes an Apple Television, which we believe could add more than $4 in EPS (5%) by CY15, which would yield over a $1,000 share price (12 * ~$84)”, he said in a statement earlier this year.
In April 2012, Adrian Kingsley-Hughes in a report published in Forbes said, “Given Apple’s existing product lineup, its plans for expansion into big emerging markets such as Chine, and then factoring in new innovations that we don’t know about, it seems quite possible for Apple to stock to hit four-digits in the next couple of years, barring any missteps by Apple”.
From a height of $705 in mid September Apple stocks have crashed to $526 as of today erasing billions of dollars in its value in just around two months. This was unthinkable till just two months ago when the graph was moving northward and that too steadily. A recent Forbes report says, “Bears see Apple as a ‘hit-driven’ company, adrift, (like Pixar), without Steve Jobs, its founding genius. Bears see unsustainable margins, increasingly encircled by ravenous and ruthless competitors who are seemingly getting close to emulating Apple’s amazing product”.
A reader while detailing as to why Apple stocks are sinking says, “…Apple stock falling is the result of consumers disenchantment with apple products – they are restricted, inflexible, closed devices. Consumers have caught on that apple devices are becoming strictly purchasing portals for apple apps. Consumers are moving to greener pastures where devices can be expanded – expandable memory, load productive apps, USB connections, optical drives, reasonably priced, etc etc. Apple has to remake itself to please consumers and meet consumers wants and expectations. I don’t think apple is willing to change its arrogant business philosophy or able to change on time and surely this will be the cause of its demise – a self-inflicted festering wound”.