Apple is indisputably the number one technology company in the world. It takes niche markets and makes them mainstream. It redefines industries. It has leaders who get portrayed by Kelso in indie dramas. And it’s currently lost a staggering $300 billion in value on the stock market. What’s up?
Isn’t Apple, like, the most valuable company in the world?
Well, it had the highest valuation. But since the stock has dropped from a high of $705 to a low of $391, not so much anymore.
Is this anything to do with Apple’s upcoming second quarter results?
Yep: They’re going to post record sales but their profits are going to see a dent for the first time in a decade.
How’d that happen?
Essentially the iPad Mini costs more to make and has to be sold at less of a profit, which is dinging Apple’s overall profit margin.
So Apple lost money last quarter, thanks to the iPad Mini?
No, actually, Apple is likely going to report making $10 or so in profit per share.
…OK, now I’m really confused.
It helps to understand that everybody on Wall Street is essentially a short-term thinker. But there is a little more to it than that.
Give me the numbers in an easy-to-digest, bullet-point list!
Gladly!
- Investors are nervous because they think Apple’s been coasting on the iPhone, the iPad, and the associated billions of dollars in app sales those two create. They’re worried somebody will out-Apple Apple, although who that might be is unclear.
- OK, they think it’s Samsung, which, really, come on.
- Apple also has about $150 billion in cash lying around they’re not using. Investors would like to see Apple throw them a dividend, or buy a company, or buy a country, or just something that shows they have a plan.
- The Apple Maps mess didn’t help matters: It doesn’t do a lot for people’s confidence in you to so completely and utterly faceplant.
- Finally, Apple’s complete and total failure to publicly acknowledge or even show any sings of giving a sh*t about its plunging stock price doesn’t sit well with people who have bought said stock.
Any relief on the horizon?
Apple has several products in the pipe according to rumor, and even more software features. So this likely won’t last long.
Especially once Wall Street gets a load of Tizen. Then they’ll likely be running back to Apple with open arms.