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Journalism of Courage
Here8217;s a market riddle: Why does Apple8217;s stock fall on the same day the company reveals a new product?
A hot gadget would seemingly give investors reason to buy more shares. But,since early 2007,the stock has fallen about half the time following a major product announcement. That8217;s either because of high investor expectations or sheer bad timing,such as when Apple debuts a product on a day that the rest of the stock market is falling.
Apple Inc.8217;s stock lost 2.10,or 0.6 per cent,dipping to 372.50 on Monday after the company revealed the newest iPhone model,the 4S. That version will be faster and more powerful than previous models. But some analysts had anticipated a more dramatic upgrade.
8220;Expectations for Apple8217;s product roll-outs have become really unrealistic,8221; said Channing Smith,a portfolio manager of the Capital Advisors Growth fund,which owns Apple stock. 8220;What are investors expecting?8221;
Here8217;s a look at how Apple8217;s stock has performed after major product announcements over the past four years.
Oct. 4,2011 Apple reveals the iPhone 4S. But it8217;s not the iPhone 5 that some analysts and tech bloggers anticipated. Apple8217;s stock falls more than the broader market,dropping 0.6 per cent. The Standard amp; Poor8217;s 500 index rises 2.3 per cent.
March 2,2011 Apple CEO Steve Jobs briefly returns from medical leave to introduce the second version of the iPad tablet computer. It is noticeably thinner than the original tablet and also faster. Apple8217;s stock rises 2.81,or 0.8 per cent,to 352.12.
June 7,2010 Apple introduces the fourth version of its iPhone. It comes with a second camera on the front that can be used for videoconferencing. The device also has longer battery life. Apple8217;s stock falls 5.02,or 2 per cent,to 250.94. On the same day,the Dow Jones industrial average and the Standard amp; Poor8217;s 500 index both plunge to their lowest level of the year because of concerns about Europe8217;s economic problems.
Jan. 27,2010 Apple unveils the iPad,a tablet-style computer that resembles the iPhone. Prices will start at 499,far below the 1,000 that some analysts were expecting. Apple8217;s stock rises 1.94,or 0.9 per cent,to 207.88. The Samp;P 500 rises 0.5 per cent.
June 8,2009 Apple announces the new iPhone 3GS,a newer version that will come with a faster processor,longer battery life and other features such as an internal compass. It also slashes the entry price for an iPhone in half. Apple falls 82 cents to 143.85.
June 9,2008 Apple introduces the iPhone 3G,an upgraded phone with a faster Internet connection,GPS capabilities and a lower price. But Apple8217;s stock falls 4.03,or 2.2 per cent,to 181.61 as investors worry that the reduced price could hurt Apple8217;s profit margins.
Jan. 15,2008 Apple debuts new MacBook Air,an ultra-slim notebook computer that weighs just 3 pounds,and an online movie rental service. The stock falls 9.74,or 5.5 per cent,to 169.04 on a day when many technology stocks plunge on concerns about a slowdown in consumer spending.
Jan. 9,2007 Apple unveils the first iPhone,to be priced at 499. Jobs says the phone will 8220;reinvent8221; wireless communications and 8220;leapfrog8221; past the current generation of smartphones. Apple8217;s stock rises 7.10,or 8.3 per cent,to 92.57.
