Apple Inc. (NASDAQ:AAPL)’s shares dropped like a rock on Wednesday, the day after the company unveiled the new iPhones. They started falling on Tuesday during the event, but the real sell-offs started coming Wednesday. As a result of all those sell-offs, Apple lost about $34 billion in market capitalization.
Apple gets four big analyst downgrades
One of the reasons Apple Inc. (NASDAQ:AAPL) had so many problems on Wednesday was because of four big downgrades from major firms. Analysts at Bank of America, Credit Suisse, Piper Jaffray and UBS all downgraded Apple shares on Wednesday because of the high price of the iPhone 5C. They believe the price tag is far above what buyers in emerging markets like China would pay.
Apple’s market cap drop
Apple Inc. (NASDAQ:AAPL)’s market cap is now right around $429 billion, although it did dip down to about $425 billion on Wednesday. That’s especially interesting when you consider that the company’s market cap was $627 billion last year on the day when the iPhone 5 launched and $656 billion the day after the iPhone 5’s unveiling.
Apple’s previous iPhone launches
In past iPhone launches, Apple Inc. (NASDAQ:AAPL) investors have typically sold on the rumor and bought on the news. Historically, in four out of the previous six iPhone launches, the company’s share price went up after their launches. Stock reaction to the launches themselves was rather minimal around the launch date in all six of the previous launches, but six months after four of the launches, Apple’s share price started rising significantly.
The two standouts in Apple Inc. (NASDAQ:AAPL)’s previous iPhone launches were the iPhone 3G and the iPhone 5. Apple’s share price actually fell significantly six months later as investors responded to sales that were not as good as expected.
So will this year’s iPhone launch be a repeat of last year’s? Only time will tell. These days, investors seem to be far more interested in sales results than whether Apple has anything new to sell.