They might have loads of cash but I think 25% plus of their market value is a fairly "big deal" for any company......
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No, it's not a big deal. As has already been pointed out in this thread the stock price has no impact on a company's day to day business and profitability, it is only of any relevance to shareholders. In many ways it is only a notional value, created by investors and analysts. The stock price is already rising significantly and I am sure will pass 700 again in the next few months.
I suspect that that is more to do with the fact that they focus on relatively few products compared with the scattergun approach of many of their competitors.
No, it's not a big deal. As has already been pointed out in this thread the stock price has no impact on a company's day to day business and profitability, it is only of any relevance to shareholders. In many ways it is only a notional value, created by investors and analysts. The stock price is already rising significantly and I am sure will pass 700 again in the next few months.
Of course its a big deal. Less worrying for apple as they have huge cash reserves and take a huge profit margin on their products.
If you think that nobody at apple is watching the stock market with an air of concern then you are being very naive. If its just a cyclic drop then fair enough but if it spirals into a drop in market confidence in apple then things could start to go wrong quite quickly.
I suspect that that is more to do with the fact that they focus on relatively few products compared with the scattergun approach of many of their competitors.
The smiley indicated a tongue in cheek response but recent releases have shown apple pioneering less and instead playing catch up.
As I've often said the phone market needs competition to drive innovation. Apple used to be a big part of that but seem to have stagnated. So in all seriousness, even though I would never buy a product from the evil apple corp I'd love to see them spend more on r&d to help drive the technology (and spend less in the courtroom stifling it).
Of course its a big deal. Less worrying for apple as they have huge cash reserves and take a huge profit margin on their products.
If you think that nobody at apple is watching the stock market with an air of concern then you are being very naive. If its just a cyclic drop then fair enough but if it spirals into a drop in market confidence in apple then things could start to go wrong quite quickly.
I am not being naive, I fully understand about stock prices and company operations. Cash reserves have no connection with stock price. Just because their stock price drops doesn't mean they need to use more cash, it is not a real loss. They are currently operating at a P/E ratio of 12:1 which is incredibly conservative for a tech company i.e. their underlying financial fundamentals are very sound. Their current dip in stock price is due to some alarmist analysts creating a certain amount of panic amongst shareholders. The price will bounce back - feel free to mark this message and let's have this discussion again in 6 months time (I certainly have not sold any of my stock).
I saw a comment the other day that if you'd bought $10,000 worth of shares in Microsoft 10 years ago, today they're worth $13,000. The same in Apple would be worth $667,000. Their growth has been massive in the last decade. That's bound to fluctuate a bit with the US economy being so rough at the moment, but they're on much more solid ground than a lot of other companies.
As you say, if it continued to fall over several months that would be cause for concern. This seems to be a temporary thing.
Apple has over a huge amounts of cash stashed away. I heard on a show the other week that they had enough to cover costs for several years if they never sold another device. I wonder what they will do with it?
they do have a massive reserve of money. however a sizeable chunk of it is trapped offshore and they can't bring in onshore without facing huge backtaxes.
they and other multinationals have been seeking a 'tax holiday' but Obama and his administration have rightly said no deal. The bush administrationhad previously allowed a tax holiday in the hopes that the companies would use the cash to spur growth by creating jobs and spending on r& d. but this didn't happen. http://online.wsj.com/article/SB10001424052970203633104576623771022129888.html
I suspect that that is more to do with the fact that they focus on relatively few products compared with the scattergun approach of many of their competitors.
Looking at this years products would indicate innovation has been lacking lately.
They are more about killing competition in the courts than innovating now a days.
I am not being naive, I fully understand about stock prices and company operations. Cash reserves have no connection with stock price. Just because their stock price drops doesn't mean they need to use more cash, it is not a real loss. They are currently operating at a P/E ratio of 12:1 which is incredibly conservative for a tech company i.e. their underlying financial fundamentals are very sound. Their current dip in stock price is due to some alarmist analysts creating a certain amount of panic amongst shareholders. The price will bounce back - feel free to mark this message and let's have this discussion again in 6 months time (I certainly have not sold any of my stock).
Right.........
So 25% drop in stock price and nobody in apple is asking questions
I've never stated whether they would bounce back or plummet. I'm guessing neither - they will level out IMHO.
I'm very glad for you and your stock. I hope for your sake that you are right. Personally I don't gamble my hard earned money.
Comments
No, it's not a big deal. As has already been pointed out in this thread the stock price has no impact on a company's day to day business and profitability, it is only of any relevance to shareholders. In many ways it is only a notional value, created by investors and analysts. The stock price is already rising significantly and I am sure will pass 700 again in the next few months.
I suspect that that is more to do with the fact that they focus on relatively few products compared with the scattergun approach of many of their competitors.
Of course its a big deal. Less worrying for apple as they have huge cash reserves and take a huge profit margin on their products.
If you think that nobody at apple is watching the stock market with an air of concern then you are being very naive. If its just a cyclic drop then fair enough but if it spirals into a drop in market confidence in apple then things could start to go wrong quite quickly.
The smiley indicated a tongue in cheek response but recent releases have shown apple pioneering less and instead playing catch up.
As I've often said the phone market needs competition to drive innovation. Apple used to be a big part of that but seem to have stagnated. So in all seriousness, even though I would never buy a product from the evil apple corp I'd love to see them spend more on r&d to help drive the technology (and spend less in the courtroom stifling it).
I am not being naive, I fully understand about stock prices and company operations. Cash reserves have no connection with stock price. Just because their stock price drops doesn't mean they need to use more cash, it is not a real loss. They are currently operating at a P/E ratio of 12:1 which is incredibly conservative for a tech company i.e. their underlying financial fundamentals are very sound. Their current dip in stock price is due to some alarmist analysts creating a certain amount of panic amongst shareholders. The price will bounce back - feel free to mark this message and let's have this discussion again in 6 months time (I certainly have not sold any of my stock).
As you say, if it continued to fall over several months that would be cause for concern. This seems to be a temporary thing.
they do have a massive reserve of money. however a sizeable chunk of it is trapped offshore and they can't bring in onshore without facing huge backtaxes.
they and other multinationals have been seeking a 'tax holiday' but Obama and his administration have rightly said no deal. The bush administrationhad previously allowed a tax holiday in the hopes that the companies would use the cash to spur growth by creating jobs and spending on r& d. but this didn't happen.
http://online.wsj.com/article/SB10001424052970203633104576623771022129888.html
Looking at this years products would indicate innovation has been lacking lately.
They are more about killing competition in the courts than innovating now a days.
Right.........
So 25% drop in stock price and nobody in apple is asking questions
I've never stated whether they would bounce back or plummet. I'm guessing neither - they will level out IMHO.
I'm very glad for you and your stock. I hope for your sake that you are right. Personally I don't gamble my hard earned money.
It's not a loss, it's the valuation on the company as in the investment in the stock market.
Apple made a net profit of $8.2 billion last quarter, meaning it makes about $32 billion a year.