Apple's shares swallow biggest loss in four years

[OhioChick]

Source: Reuters

Wed Dec 5, 2012 6:10pm EST

(Reuters) - Apple Inc shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.

The sell-off, fueled by a forecast by an influential research firm that the iPad maker is continuing to cede ground to rival Google Inc Android gadgets, rounded off a bleak 10 weeks for the most valuable U.S. company.

The stock was one of Wednesday's biggest percentage losers on the S&P 500, shedding $35 billion of market value as more than 37 million shares changed hands -- blowing past the company's average daily volume over 50 days of 21 million.

Apple's shares, once among the most desirable of portfolio holdings, have headed steadily south since September on growing uncertainty about the company's ability to fend off unprecedented competition. This year saw a surge in sales of Amazon.com Inc's cheaper Kindle Fire and Microsoft Corp's first foray into the tablet market with its Surface.

Read more: http://www.reuters.com/article/2012/12/05/us-apple-shares-idUSBRE8B40VK20121205

[mucifer]

1. That's good they are too greedy.

Yes, I am typing on a macbook. But I do believe there should be a limit to how much money people and corporations make.

[shaayecanaan]

3. They're being forced to compete on price...

Galaxy S3 is selling for $599 on Kogan, iPhone 4S for $699.

More importantly, its becoming more difficult to deliver a phone which is materially different from the last one. And the fact is that 99.9% of the software out there for both android and ios is absolute crap.

I'm finally going to bite the bullet and buy a 3DS, I'm tired of playing 99-cent crap games on the train.

[SilveryMoon]

19. After having a psp before the mobile craze...

I never could get in the mobile gaming craze except for a a few free games.

[shaayecanaan]

23. Why would you develop Zelda for a mobile phone?

if you're going to be outsold by some casual game requiring you to pick the nits off a dog's arse?

[SilveryMoon]

27. Why do you think I would develop anything?

Or do you mean that psp gaming is dying?

If so, then I yeah agree. But do games cease being fun the older they get? I still get much enjoyment out of my years old psp and will continue to do so.

[shaayecanaan]

34. It was a hypothetical...

more of a criticism of smartphone games than anything.

[brooklynite]

7. If by "greedy" you mean.....

...they keep making products that people want to buy, and people keep giving them money? Certainly not something we can allow to continue!

[Warren Religion]

35. When the Lord Jobs returns, he's gonna git you!

Just kidding!

[question everything]

2. Will be nice if they split 10:1

this will allow more people to own it.

With price over $300 for the past two years, only institutions could afford it. Let small investors, individuals who actually use Apple's products and enjoy them, show their appreciation with their investment.

[targetpractice]

5. Look how you would've made out if you bought Apple stock instead of products...

Read it and weep... I'd be worth millions!!

http://kyleconroy.com/2010/04/apple-stock

[question everything]

10. Actually, I have

Purchased 100 in 2004 and after their split I sold half and last year sold another half because it was too heavy in my portfolio. Which is why I am not worth millions..

And have been using only the desktop Macs and Macbooks. No iPhone, iPad, iTune, tablet etc. but am grateful for all the millions who do.

It is possible, though, that many are selling their shares to take advantage of the 15% capital gain which is going higher next year.

[DaveJ]

4. Their hayday is over.

I expressed this to my wife, literally last night, who has been thinking about buying their stock. My biased opinion.

Apple devices work well, high quality, they are simple, behave the way one would expect... and they are becoming just plain boring. Jobs is gone, the Mini was a flop, MS has a tablet, and I speculate that they have no more ideas. I wish the best for Microsoft, they are hated and ignored by most everyone no matter how hard they work, they remind me of myself.

[onehandle]

21. They've sold millions of Minis and can't keep up with demand.

Making billions is a flop?

[former9thward]

6. This is capital gains selling.

Apple is up huge this year and people are selling so their capital gains won't be taxed at the higher rate next yar.

[DaveJ]

9. Not sure about that. Everything else was up today.

I've heard the phrase "as Apple goes so does the market" but today that wasn't the case.

[former9thward]

11. Other stocks have not have the huge gains Apple had this year.

Stock will continue to go up once the new year begins.

[DaveJ]

13. We'll have to agree to disagree (on our predictions since nobody really knows)

More than one analyst says they need another home run to continue their long rally. I just don't see it happening. But I don't know -- I just wouldn't recommend to anyone to buy Apple now. That's all.

[Morganfleeman]

12. It's that and

a few other factors. Short selling interest is at multi-year highs which will weigh on the stock. It's also the most widely held stock by hedge funds. Many of these hedge funds need to lock in year-end gains in AAPL to make up for losses in other parts of their portfolio. They also don't want to be the last fund holding the bag if everyone is selling. I.e., you have very large institutions heading for the exits all at once, institutions that often are required to deliver very high rates of return to their investors.


There is also the fact that AAPL has turned into a big momentum stock with increasing volatility in the past few months. Moves to the upside and downside have been much large recently.

And to boot, many funds are trading AAPL with leverage. These wild moves lead to margin calls which lead to forced liquidations.

[still_one]

26. Actually I heard there were a lot of reasons. One was a misinterpretation of iphone5 sales by an

analysts

http://appleinsider.com/articles/12/12/05/latest-apple-stock-selloff-blamed-on-misinterpreted-story-on-iphone-sales

Another was a change of margin requirements for several hedge funds, and then the cross-currents and manipulation that usually occur at this time

[Cali_Democrat]

8. Hopefully Apple will now lower their prices for their overpriced devices

[democrattotheend]

14. Sweet, gives me a chance to buy back in

I am killing myself for selling at $200. But it keeps going higher so I have not wanted to buy.

[Eddie Haskell]

15. Bullshit!

This has nothing to do with Apple's fundamentals. There are $200,000,000,000 (billion) in call options about to expire in Jan. If the stock goes up there will be an enormous payout. Wall Street placed too many bets and now doesn't have the money or doesn't want to cover their bad bets. What we're watching is manipulation. The fat cats are using the media to bash the stock.

[kag]

16. That's what I think, Eddie.

Those who can manipulate the stock are doing so. I think we'll see Apple hit a low, and then they'll all start buying again. I'm not worried about Apple stock falling too far.

But I do agree with someone up thread who was wishing that Apple would split and let a few of us little people buy in. But if they didn't do it at 700 they sure as hell aren't gonna do it at 538.

Just my two cents.

[Eddie Haskell]

25. Read about this weeks ago.

Apple had been above $700 and was dropping like a rock. The analyst expected pressure on the stock to keep it below $550 until Jan. the 18th option expiration. Buy late afternoon on the 18th.

Just like in 2008 Wall Street is on the hook and we're bailing them out. IMO the SEC is looking the other way because if this blows up the scandal could bring down the Street.

[MightyMopar]

17. Try to bring jobs back to America and Wall Street will punish you

"Trip Chowdhry at Global Equities Research said the market was also jolted by reports that Apple had shifted production of some iMac computers to the United States."

http://www.rawstory.com/rs/2012/12/05/apples-downward-spiral-accelerates/

[Sen. Walter Sobchak]

30. Apple never stopped small-scale internal manufacturing

Both in California and Ireland.

[Blackhawk44]

18. these devices cost less than $50 to make ...

http://venturebeat.com/2012/09/15/hardware-is-dead/

competition is coming,
these things will soon be given away
just like coffee mugs

[onehandle]

20. I will buy any DUers Apple stock for 110% of its value right now.

Unless you are are large scale holder with options, you are a Fool to sell right now.

[shaayecanaan]

22. Really?

I am inclined to buy some and sell it to you just to make a 10% margin. Are you serious or is this just internet talk?

[wordpix]

24. could it be Foxconn and dorm fires in China/Taiwan are affecting sales? I hope so

Just wondering. Apple hires companies overseas to make their products and does not allow them much in profits. The contractors then squeeze their workers, requiring long hours, crammed dorms, and denying them worker and environmental protection. Apple should clean up its act. I wouldn't buy a thing from that company and word is getting out that fires and deaths in Apple-connected workplaces and dorms are really a result of Apple's shoddy business practices.

[Sen. Walter Sobchak]

28. The practical problem is where does their next jolt of growth come from?

The iPhone has had its heyday as people in the west were buying smartphones for the first time. But between the extremely high retail price, the lack of carrier subsidies, high tariffs and weak currencies in much of the world the iPhone is nothing more than a mythical luxury good.

This is the emerging cellular market and Apple is irrelevant. While Blackberry and the Android hoards are all-in. The iPad is the same story, it is priced out of the emerging market.

Selling westerners a new iPhone every two years as their contract expires will no doubt be lucrative for many years to come, but that isn't projected growth justifying such a stock price.

[Big Blue Marble]

29. One word...."their next jolt of growth comes from"....China.

The market for iphone 5's is just opening there.

[Sen. Walter Sobchak]

32. Ooops, I didn't mean to do that.

The best selling phone in China in made by Huawei, costs the equivalent of $30 and looks like something Nokia made ten years ago only thinner.

There are two China's, the one that can afford $500+ cell phones isn't very big.

[onehandle]

36. Apple is selling more of everything they make and making more money than ever.

None of this has anything to do with sales or competitors. Wait until the Q1 report.

I don't think anyone read past the four paragraphs of the OP.

[eilen]

33. I'm giving up iPhone

and putting off replacing my 7 year old macbook. While the product is good, it is limited and very expensive. I just purchased a new Nexus 7 and plan to go prepaid as my contract is completed. For me, portability, versatility and flexibility are what is important. I don't want to be trapped in one company's intra-mall.