Apple stock sinks below $400
Apple's shares finally plummeted below the $400 point.
As of around 10:00 a.m. PT today, the stock trading just below $400, if only momentarily, crossing a threshold that seemed unlikely when it was high and mighty at more than $700 a share last September.
Today's market action saw the shares lose more than 25 points, or around 6 percent of their total value. The drop below $400 is mostly a psychological barrier. But it represents the stock's continued descent after rewarding investors with ongoing gains last year.
The intervening months haven't been kind to Apple as a company or as a stock. The shares began their downward spiral late last year as mutual and hedge fund managers started to sell off some of their holdings. But the stock was especially hammered after Apple announced its fiscal first-quarter results in January.
Apple actually reported record revenues. But earnings fell short of expectations, prompting investors to start bailing. A report claiming that Apple had cut its component orders for the iPhone sunk the stock even further and many analysts and investors fretted that the company had lost its magic touch.
Some analysts aruged that the fears were overblown and that investors were overreacting.
"We believe this news is not new, as we first discussed potential supply chain component cuts in our report on December 19," JP Morgan analyst Mark Moskowitz said in a note on January 14. "We believe the news is more noise, and we believe the stock reaction has been overdone."
As a company, Apple has also been hit by complaints that it's sitting on a huge treasure chest of cash, refusing to share more of it with investors. The stock's performance has also been hurt by the lack of any exciting product announcements coming from Apple since last fall.
http://news.cnet.com/8301-13579_3-57580061-37/apple-stock-sinks-below-$400/
Edit:
Apple Falls Below $400 as Supplier Reports IPhone Chip Glut
Apple Inc. (AAPL) dropped below $400 for the first time since December 2011 after one of its audio-chip suppliers, Cirrus Logic Inc. (CRUS), reported an inventory glut that suggests iPhone sales may fall short of analysts’ expectations.
Apple’s shares declined 6 percent to $400.86 at 12:52 p.m. in New York, and earlier touched $398.11, the lowest intraday price since Dec. 22, 2011. Cirrus, which makes sound components for the iPhone and iPad, is an indicator of demand for Apple’s top-selling products, according to Peter Misek, an analyst at Jefferies & Co.
“We blame Apple for losing its mobility mojo,” Vernon Essi, Jr., an analyst at Needham & Co., wrote in a research report today. “This was simply an inventory overbuild for the iPhone 5 relative to Apple’s forecast.”
Cirrus yesterday reported preliminary fiscal first-quarter net revenue of as much as $170 million, less than analysts’ average $197.3 million estimate, according to data compiled by Bloomberg. Because Cirrus relies on Apple for most of its revenue, this suggests that the iPhone maker told the chipmaker to anticipate fewer orders, Misek said. “Apple is reducing expectations,” Misek said in an interview.
Income Decline
With no new products debuted since October, Apple may report an 18 percent decline in net income to $9.5 billion, or $10.07 a share, for the fiscal second quarter, according to the average of analysts’ estimates compiled by Bloomberg. That would be the first decline since 2003.
Apple is set to report fiscal second-quarter earnings on April 23, when the company is also expected to provide an outlook for the current period.
Cirrus will record a net inventory reserve of $23.3 million for the fiscal fourth quarter, which ended in March, the Austin, Texas-based company said in a statement yesterday. Most of that -- $20.7 million -- is from a high-volume product from one customer, Cirrus said, without naming the client.
Apple accounts for more than 90 percent of Cirrus’s revenue, according to supply chain estimates compiled by Bloomberg.
Steve Dowling, a spokesman for Apple, didn’t immediately respond to a request for comment.
