Apple slips below $600 in first trading day after exec shakeup

http://news.cnet.com/8301-13579_3-57542903-37/apple-shares-drop-below-$600-in-first-trading-day-after-exec-ousters/

by uladzislau • 14 years ago

22 42 14 years ago

news.cnet.com

justin04697• 14 years ago

IMO, Apple has lost it's touch just as they almost won me over along with thousands of Android fan boys with the iPhone 5. I bought the latest 13" MacBook Air the day it came out. I was impressed by the form factor but that's about it. The stability and smoothness everyone used to rave about just isn't there. I refuse to upgrade to their latest OS.

That's not to say Apple is disappearing anytime soon, but I think they have lost their touch. I believe it will be a slow but steady decline in value, down to a more Google-like share price.

Samuel_Michon3• 14 years ago

"The stability and smoothness everyone used to rave about just isn't there."

If so, that experience might have something to do with:

"I refuse to upgrade to their latest OS."

justin04697• 14 years ago

Lion to Mountain Lion. I'm not that far behind and I think it's fair to expect a product which has been available for quite some time and shipped with my brand new laptop should be more stable and lived up to hype. That being said, perhaps the problem was believing all the Apple hype that is spread - I had my expectations set too high.

Tyrannosaurs5• 14 years ago

Hold on, they've lost their touch since they launched the iPhone 5?

That's been a tough six weeks for them.

Re. OS X Mountain Lion - you should upgrade. Lion was as close to a dog as Apple have release, Mountain Lion is absolutely an improvement. I can understand someone on Snow Leopard not wanting to move to Lion but your Air presumably shipped with Lion. Frankly that's the version you get away from, not hunker down on.

justin04697• 14 years ago

I meant with my experience with the MacBook Air. It's fair enough to say that every major product (software or hardware) has issues that need fixed but I had hoped with Lion it already would have been.

brandall10• 14 years ago

I don't know if it's Apple losing its touch so much as the competition having gone through that period of playing catch-up, and finally they have (or are getting closer and have begun to innovate in different directions). They've been the industry heavyweight for too long and it's beginning to show.

I actually moved to Android with the introduction of the iPhone 5/iOS 6. The maps thing had somewhat of an impact, but it was more looking at how much Android has progressed with Jelly Bean (also considered WP8 which looks very impressive) vs how much iOS appears to have stagnated.

As for the hardware, I love my 2k12 11" MBA but I can't say for certain I'll remain in the Apple ecosystem on my next purchase. As a Rails dev I just need a *nix of some sort.

justin04697• 14 years ago

That's probably true too. I think that Apple's smartphone and computer market share will slowly decline in favor of other comparable options.

kalid3• 14 years ago

I don't know about losing its touch, but wanted to offer some corrections re: "I believe it will be a slow but steady decline in value, down to a more Google-like share price."

1) Comparing share prices between companies doesn't make sense (the share price is total value / total number of shares, the latter can change). That said, GOOG's current share price (~670) is higher than AAPL's current price, and near its all time high (~700).

2) If you meant to compare total values, that Apple should be worth as much as Google... Apple is over twice Google's total value (550B to 220B) so that'd be an enormous decline in value.

3) If you meant to compare relative value (price/performance), Apple is actually a better "deal" for investors in that its P/E is around 14, the market average, while Google's is 21. 14 dollars in Apple will create $1 in earnings, but 21 dollars in Google is required to do the same.

Jabbles• 14 years ago

"an enormous decline"

On the same scale as the growth that Apple has seen over the last 2 years.

justin04697• 14 years ago

Fair enough :) Bad example with the Google share price and point taken with value / # of shares. You are correct with #3. I know Apple is worth is significantly higher than Google, I just think that gap will close (Google will raise, Apple will lower) over a long period of time - as in years. Could be totally wrong, it's just something I could see happening.

seunosewa• 14 years ago

I think the share price drop has more to do with Google's Nexus device announcement.

Tyrannosaurs5• 14 years ago

I think it's 2% which is basically within the range of what might be seen as noise (and now on the way back up).

It's the market being the market and fluctuating in the way things do when you give a bunch of people a load of money and tell them to buy and sell things they don't understand.

Some of the people selling might be thinking about the Nexus (though I think very few), some might be thinking about the execs, some might have just hit the wrong key but most of it is just stuff that we'll never understand and in the long term almost certainly means nothing.

Looking at the market over short periods is a route to madness.

Tyrannosaurs5• 14 years ago

Apple's movement over the past three months has been an exaggerated version of the NASDAQ or the Dow, up a bit around September, down to it's levels of about three months ago.

In Apple's case that peak coincided with the my hyped iPhone 5 launch which might explain some of the exaggeration.

There are many many people who understand the market better than I do but to me at least this is a complete non-story.

robinjfisher• 14 years ago

Agreed.

Over the last year, Apple's share price has swung widely from $363.32 to $705.07.

Surely a more accurate statement would be that the share price has increased dramatically. Swung widely implies ups and downs.

The current dip is similar to one seen in April and its share price is still markedly up YoY.

corin_• 14 years ago

Currently it's hovering around $600, this is $105.07 lower than the high and $236.68 higher than the low. Sure, "swung" may lack the implication that overall the price has been going up, so it's not the complete story, but I think it's fair to say there have been pretty wild ups and downs.

pilsetnieks• 14 years ago

What if it was NASDAQ or Dow that moved because of Apple?

(I suppose Apple is not yet that big but it could happen someday. Maybe a popular stock having much more trades than others could have such impact?)

radicaldreamer• 14 years ago

The NASDAQ does move because of Apple, it's weighted as 19.8% of the index.

chollida12• 14 years ago

Umm, Apple isn't part of the Dow

http://www.bloomberg.com/markets/stocks/movers/dow/

Tyrannosaurs5• 14 years ago

Provided as a comparison point as to what the US markets are doing generally.

JumpCrisscross• 14 years ago

The S&P 500, at time of writing, is down 0.26%. AAPL has a coefficient of expected co-movement with the market (ß) of 1.22. Thus, the expected co-movement of AAPL to the market is -0.32%. AAPL is down 1.8%. The remainder would be attributable, given no more information, to non-systemic factors.

AAPL currently has an implied volatility of 28.93%. The odds, quick-and-dirty Gaussian [1], of today's return happening by chance is less than 1%.

>"Apple's movement over the past three months has been an exaggerated version of the NASDAQ or the Dow"

Over the past three months (60 trading days) the historic ß has been 1.26. This would make the systemic portion of today's return -0.33%. Curiously, the historic ß for the past year (250 trading days) has been 0.94.

[1] Using a non-Gaussian alpha-stable or asymmetric generalised hyperbolic distro still implies this being a significant event not attributable to market noise (though there is some shadiness happening in the markets today with system's coming online after a non-standard detachment, e.g. KNX declaring self-help)

nicholassmith2• 14 years ago

I think these articles need to come with the caveat of "markets move and shift". I'm sure no one at Apple is panicking, it's easy to be lured into watching the share prices as a statistic of success but Apple has enough cash in stockpile that their share price isn't overly important, unless you're a shareholder.

If it dropped 20% in a day I think it'd be safe to say there was a loss of investor confidence.

stcredzero2• 14 years ago

This demonstrates the difference that contextual knowledge makes. Exec ousters are generally a decent indicator to sell. However, those of us who have been following Apple will know that these particular decisions were good, leaving Apple with a cohesive "four man band."

Information asymmetry. It's what makes markets interesting and how people make lots of money.

joejohnson• 14 years ago

Totally. Wall Street doesn't understand Apple like us HNers do.

EDIT: this was sarcasm.

jpdoctor• 14 years ago

And vice versa.

smackfu• 14 years ago

Even us smarties don't "know" anything. Apple has been doing fine in the past with these execs. If there is discord, it's not affecting sales. Record revenue, record profit.

In the future there is now some uncertainty: was Scott Forstall the key to iOS? Is Jony Ive a good UI designer? Will Bob Mansfield retire again next year? If you don't like that uncertainty, it's a good time to sell.

MatthewPhillips• 14 years ago

Know is way too strong of a word here. You know a firing is good when it's a salesperson who's been with your company for 6 months and hasn't gotten a sale yet. Scott Forstall was with Apple for what, close to 15 years?, and worked his way up to a SVP position managing the company's most important product -- there's absolutely nothing about this firing that an outsider who only "follows" Apple can confidently say that it was good. If it took Tim Cook this long to decide that the costs of keeping him outweighed the benefits, it definitely wasn't an easy decision and the repercussions are big unknowns.

chollida12• 14 years ago

I'm going to have to partially disagree with this.

I agree there is definitely information asymmetry going on. However, usually a movement in a stocks price is lead by institutional money. This is for the most part what every hedge fund competes on, a competitive advantage.

If you think that your observation has escaped institutional investors eyes then I'd disagree with you. I'm completely biased as I'm in the industry but I think most people would be very surprised by just how much the average hedge funder knows about the companies they have positions in.

There were rumors circulating a couple days before the announcement that this was coming.

cremnob• 14 years ago

I'm also in finance. I'm constantly amused by comments on HN that dismiss "Wall Street" and the investor class in general as being stupid when they show a poor understanding of markets themselves.

snowwrestler• 14 years ago

P/E is below 14 for an innovative technology company whose products are selling out worldwide. Sounds like a buy situation to me.

Apple slips below $600 in first trading day after exec shakeup

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