Word count: 558
With the
recent buzz over Apple Inc.’s innovative strides in breaking new technological
ground during its annual fall launch event, it comes as no surprise that news
publications all around are jumping on the bandwagon and shedding light on all
things Apple. As such, this writing piece seeks to summarize and discuss
Apple’s financial activity during and after its recent launch event as well as
to determine the causes behind it, and its implications on the company.
In the
selected article, ‘Apple stock falls after announcements,’ Krantz (2014) tells
of Apple’s stock fluctuation during the launch event at the Flint Performing
Arts Centre, Cupertino, California on September 9; for which was put together
to announce the company’s new hardware line, iPhone 6, iPhone 6 Plus
and Apple Watch; and mobile payment
system, Apple Pay. Additionally, he offers
a look into analysts’ expectations of the said products prior to the launch
along with statistical data of the company’s recurring stock variation from
previous launches.
Dubbed
as a ‘wild ride,’ Apple’s stock fluctuation seemed to live up to Krantz’s (2014)
connotation as the article recounts quite a sizable range in the rise and drop
of the company’s shares, soaring as high as $103.08 before plunging as low as
$96.14, all within a day. Interestingly enough, Apple’s shares perked up amid
the reveal of the iPhone 6, iPhone 6 Plus and Apple Pay but evaporated just as quickly during the unveiling of
the Apple Watch, ultimately closing
down 37 cents at $97.99.
In terms
of the article’s journalistic stance, Krantz (2014) comes off as unconvinced by
the company’s new gizmos, quoting Richard Jones Limited analyst Bill Kreher who
maintains a similar standpoint, articulating a number of setbacks from the Apple Watch namely its exorbitant price,
overdue release date and forced iPhone
pairing. He then concludes that it would certainly take much more to win over
high-demand investors and their deep pockets even if the company may have
fulfilled their essential expectations.
Putting
Krantz and Kreher’s viewpoints into perspective, surely there must be a link
between investors’ expectations towards a product with the company’s stock
market behavior. If investors’ reactions towards Apple’s state-of-the-art
devices do dictate how the stock trades after its launch event, then the occurrence
of the late-day drop could most likely be a reflection of new investor concerns
towards the Apple Watch.
To a
certain extent, Apple’s new offerings are welcoming additions to the company’s
widening portfolio, of which would inspire Apple enthusiasts to upgrade and
lure a few new customers. However, the same cannot be said for the company’s
stock market, especially when analysts and investors are now portrayed as
having higher expectations and being more cautious towards what they intend to
purchase; that being the case of Apple’s wearable device. This only results in
the positioning of Apple within a bearish market, a market condition that
depicts the depreciation of its stock prices. If this is not dealt with
strategically, investors may pull out, culminating a significantly lower demand
for Apple’s stock, which in turn perpetuates the downward spiral.
Given the implications as such, Apple would
have to determine other alternative solutions, be it through finer product
upgrades or another brand-new technical appliance, either of which should
exceed publics’ expectations, if it wishes to excite the masses, satisfy
investor demands, increase stock prices and reinvigorate the business.
Reference:
1.
Krantz,
M 2014, ‘Apple stock falls after announcements’, USA TODAY, 9 September, viewed 17 September 2014, <http://www.usatoday.com/story/money/markets/2014/09/09/apple-product-unveiled/15334771/>.
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