Autumn is traditionally the time of year when people start snapping up Apple products - and investors, in anticipation of another blockbuster holiday season, do the same with Apple shares. But this year, even though Apple's iPhones and iPads don't seem to have lost any of their allure, its stock seems headed straight for the discount rack, Nick Wingfield reports in Thursday's New York Times.
On Wednesday, Apple's shares slid 3.8 percent. They outpaced a broader decline in the stock market set off by investors' uncertainty about how the outcome of the presidential election will affect taxes and consumer demand for the types of products Apple sells. The stock was up 0.7 percent in premarket trading on Thursday.
During the campaign, President Obama proposed increasing capital gains tax rates for people earning over $250,000 to 20 percent from the existing rate of 15 percent, and his re-election Tuesday night may have prompted some investors to unload shares in an ticipation of a broader sell-off in stocks ahead of a tax increase, analysts said.
Owners of Apple shares would have good reason to fear higher taxes on capital gains. Apple shares have appreciated mightily since 2005 when they were about $35 apiece; they began this year at $411 and peaked at more than $700 in late September. The drop on Wednesday only added to what has been a grim few weeks for Apple shares, which have fallen over 20 percent from that peak, to $558 on Wednesday.
The decline has followed a sequence of seemingly unrelated events, including a broader-than-normal overhaul of its product line that is expected to hurt profit margins in the near term and a rare shake-up in Apple's senior ranks.
“It has just been wave after wave of bad news,†said Gene Munster, an analyst at Piper Jaffray.
The events also do little to diminish the questions reflecting longer-term concerns with which investors pepper analysts like Mr. Munster. How much bi gger can Apple - with a $525 billion market value, the biggest of any corporation - get? Won't Apple soon run out of people to sell iPhones, iPads and Macs to?
