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Apple’s surprisingly bad day: What’s spooking its investors?

Apple’s stock had one of its worst days in four years on Wednesday, despite no news coming from Apple (s AAPL) about the company’s financial situation or products. Apple lost $35 billion from its market cap — its largest decline since December 2008 — when its stock dropped 6.43 percent to close at $538.79. Granted, most companies would be pretty happy with a stock price that high. And Apple’s stock is still up more than 40 percent over the last year. But there has been a troubling, three-month long dip in Apple share prices, from its peak of over $700 in mid-September.

There are a variety of factors that have caused the stock to dip and rise since September, but Wednesday was particularly odd because there wasn’t any obvious thing that should be spooking Wall Street. Here are some financial analysts’ best guesses as to what’s afoot:

Apple has set itself up to have a monster sales quarter thanks to the way the company has timed its new product releases this fall. Will investors be assuaged come January earnings time? Maybe, maybe not. It seems like one of the biggest questions investors have isn’t about the current quarter, but what comes after: whether Apple has another “next big thing” in it, and what that will be.

13 Responses to “Apple’s surprisingly bad day: What’s spooking its investors?”

  1. Tim of Angle

    Everybody’s cashing out because they want to pay capital gains tax under Republican rates rather than Democrat rates. They’ll jump back in come January once they’ve leveled up their tax basis; they know as well as anybody that Apple stock is headed back up.

  2. activeinspiration

    Apple isn’t controlling the market that much anymore with the competition. There users are getting older,and the younger generations have more options and are finding other solutions at less expensive prices not to mention our economy. Most of all there offerings haven’t been that impressive beginning iPhone 4s

  3. I’ll vote with @Jim H. – end of year profit lock-in. Nothing else to see, move along. Trying to come up with some sweeping ‘reason’ (and enough weasel words thrown in so when, and they usually are, wrong they can deny it) is what analysts do to try to get their name in the press. Done and done.

  4. Jim Hassinger

    I actually think it has nothing to do with Apple the company, just Apple the cash cow. The end of the year is coming. Time to pick a few billion off the Apple tree, in time for the end of the year and the new tax levels the market thought (yesterday) were actually going to come. So they get some cash and shovel it into their accounts. End of story. If it wasn’t them, it would be some other company worth in the hundreds of billions.

    • @ Danox: Better fundamentals? Sorry, I obviously missed your /s tag. Amazon is a profitless wonder in a low-margin, harshly competitive sector (retail). Yet Wall St. thinks it’s worth a P/E of something like 300. Apple has done an incredible job of maintaining high profit margins and growing sales, but has a P/E of 12 and PEG under 0.6. They would have to crash and burn immediately to justify those ratios. Where’s the evidence of that happening? Saying “Apple needs new product categories” is another way of saying “I can’t really identify any threats to Apple, so I’m going to come up with an irrational worry that has no rational defense.” Apple isn’t in the novelty business. They don’t need new product categories any more than the dozens of tech companies that have never invented a new product category. I could go on, but unless someone can point to an actual competitor to Apple or at least a definable threat, what’s there to discuss?

      • eldernorm

        Thanks, That was well stated and totally logical. However Wall Street will never understand it. :-( I think most of the anal….yst cannot deal with anything that is not a Walmart.

        Every company must be clunky, slow moving and exactly the same with every other company for them to make sense of. A company like Apple is so far in the future for them, its not understandable. :-(

  5. I’ve heard from various bloggers, analysts,… asking what comes next. It seems like these people need to go back to Apple’s history and see how often they come out with a new category like an iPhone or iPad. It’s about every 3-4 years. Why are all these people questioning this while the category of iPad came out 2+ years. Even if Steve Jobs is around, Apple probably would not have a new category out at this time!