If yesterday’s numbers were to weigh in on the subject, the answer would be simple, $392.05. Apple Inc. (NASDAQ:AAPL) opened today’s trading at $387.99 before beginning a drive towards $400 reaching $399.60 just after 11 AM before beginning a descent towards yesterday’s closing mark where it is presently trading.
Unlike other falling apples, this one won’t lead us towards a theory of gravity but rather continue to breed speculation on just how far Apple Inc. (NASDAQ:AAPL)’s stock can drop.
Recently, Bruce Greenwald carried out a virtual Fireside Chat with Li Lu, the founder and chairman of Himalaya Capital. Greenwald and Lu covered multiple topics during the discussion, addressing everything from the value investor's approach to appraising businesses and what he had learned from his great friend Charlie Munger. The duo also discussed China's economy Read More
Many have suggested that the $400 mark was something impossible. That has been proved incorrect this week. Apple Inc. (NASDAQ:AAPL) has lost roughly 40 percent of its value over the last six months and yesterday’s close below $400 marks the first occasion that that has happened since December of 2011. With this drop, Apple Inc. (NASDAQ:AAPL) has also relinquished the title of “Most Valuable Company” by market capitalization, as it handed that baton to energy behemoth Exxon Mobil Corporation (NYSE:XOM) during its fall.
With earnings reports out next week, many investors not holding Apple Inc. (NASDAQ:AAPL) shares are questioning whether now is the time to finally invest in the company. Words of caution like “don’t try to catch a falling knife” are being spoken by numerous analysts uncertain of Apple Inc. (NASDAQ:AAPL)’s future. Or, as Auerbach Grayson analyst Richard Ross told Forbes: “Until this stock can show me something, there’s no reason to be a hero.”
This latest drop in Apple Inc. (NASDAQ:AAPL)’s stock was precipitated by an announcement by Cirrus Logic that included “a decreased forecast for a high-volume product.” While Cirrus wasn’t specific about who that customer was, 90 percent of its overall business is done with Apple Inc. (NASDAQ:AAPL).
This however, doesn’t tell the whole story. Since Steve Jobs’ death, Apple Inc. (NASDAQ:AAPL) has not released a single piece of revolutionary technology. Incremental improvements of existing products will not slow the decline of Apple Inc. (NASDAQ:AAPL)’s share price and few see anything new from Apple Inc. (NASDAQ:AAPL) on the immediate horizon.
Additionally, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and Google Inc (NASDAQ:GOOG) remain hot on the heals of Apple Inc. (NASDAQ:AAPL) with products of their own. Google’s Glass and Chromebook represent new products that could end up becoming game changers. Samsung’s Galaxy S4 is also potentially poised to make the iPhone almost passe if marketed well. In 2012, Samsung eclipsed Apple in global smartphone market share with 30.3 percent of the market, compared to Apple’s 19.1 percent.
We’re not going to put a number on Apple Inc. (NASDAQ:AAPL)’s present struggles but until analysts see something new, (summer, fall?) it’s tough to see a reason why its stock won’t continue to fall.