Apple is a company that has always had an air of mystic around it and the release of new Apple products and services has generally been met with consumer enthusiasm which has driven Apple stocks in an upwards direction. It’s because of the success of their products that Apple has one of the largest market caps and is likely to break the $1 trillion mark for market capitalization.
However, after today, it may just take the company a little longer to reach this mark because in a single day of trading, the company lost $34.9 billion in capitalization. To say the year end has been hard on Apple stock would be an understatement with the company’s stock price dropping by 6.43%, ending the day at $538.81. The stock is also down 20% from its September high when it sat at a lofty valuation of $705.07. Overall, the stock is still up 20% this year, but to lose this much, this quickly, just can’t be sitting well with executives.
What makes this situation even more puzzling is the fact that as we approach the busy shopping season, Apple has some good products available. There is the iPhone 5 as well as the new iPad and iPad mini and of course, we can’t forget about all of the other products that the Cupertino company has come out with. So the question is, why is Apple’s stock tanking? In this regards, there are many theories and all are equally good. It’s very possible that the markets are responding to one or more of the following concerns including lighter iPhone sales then expected, reduced tablet market share or the reluctance of Apple to offer a special dividend. There are also indications that margin requirements on Apple stock are being raised. No one knows exactly the cause of today’s decline, but we’ll have to see how the markets respond tomorrow when they open again.