back to article You'll never believe it: Apple stock is going for CHEAP

Frantic fanboi investors might be freaking out today as Apple stocks appear to have lost 85 per cent of their value over the weekend, with the price dropping from around $645 to an opening price of $92.22. But fear not, Apple lovers. The apparent plummet is just a bit of share shuffling to try to reignite investor interest in …

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I see this as a baaaaaad sign.

Something fishy going on. Problem is they have devalued it beyond the point of recovery. That usually happens right before the whole thing collapses.

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Anonymous Coward

Re: I see this as a baaaaaad sign.

That's because you are baaaaaad at math.

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Day

Re: I see this as a baaaaaad sign.

"Stock split" does not mean what you appear to think it means. The company has not been devalued at all. After the split the company was worth exactly the same as it was worth before the split. There were 7 times as many shares, and each share was worth 1/7th as much as before.

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Anonymous Coward

Re: I see this as a baaaaaad sign.

It's a share split, not a devaluation. Which ever way you cut it, I'm up 2334%.

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Re: I see this as a baaaaaad sign.

So lets split it 7 more times and make it 10's of dollars? no, something smells, and I suspect it's someone they want to take care of leaving the company. i've seen it happen before. The price of that stock will never recover, and if it does it will be over valued at that point.

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Anonymous Coward

Re: I see this as a baaaaaad sign.

If the price DID reach $700/share, the company would.be worth about 7x what it was at it's peak.

They could do another 10:1 split and get it down to under ten dollars for a share but they'd still be worth just the same.

You may be right that it's not the best of signs- they're clearly finding it hard to find buyers for shares at that price or they want to make it easier to buy, helping speed up the break-up of a big shareholder voting bloc.

But the maths says the company is worth the same today as yesterday (in broad numbers), not 1/7th what it was before.

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Re: I see this as a baaaaaad sign.

Really baaad math! $92 / 7 != $10

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Re: I see this as a baaaaaad sign.

There's good and bad in this, and I suspect it's more psychological than practical.

Cheaper buy-in you might not want to spend $700 on one share but $350 for 5 feels better, % fluctuations don't appear as bad; a $70 drop on a $700 share is bad, but a $7 drop on a $70 share feels better (even if it means the same).

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Re: I see this as a baaaaaad sign.

Ummm, you do realise that if you had 10 shares worth $700 each, you now have 70 shares worth $100 each. I don't get how this 'smells' in any way. Maybe Apple would just like their stocks to be more fluid, by allowing people to trade them more easily? After all, $700 per share is an unwieldy amount for the small investor.

The only thing dodgy would be if they said 'we're going to split our $700 shares in 70000 $0.01 shares, because that would prevent them from being able to be devalued. People would run away quite quickly if they did that, but they're not going to, because it would be stupid.

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Anonymous Coward

Nothing to do with their lacklustre product announcements recently then?

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Which ones would those be exactly? Are you refering to the developer conference keynote from last week?

Idiot.

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Wow the b u t t hurt is strong with this fanboi. Yep the keynote where the main headlines were about the CEO trashing a competitor as opposed to announcing anything particularly exciting.

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Stock splits are fairly common (although 7:1 splits aren't, I'll grant you), and are usually a sign that the stock (and presumably the company) is doing well. As the article alluded, it's to make the stock more accessible to the average buyer, as opposed to the institutional buyers who can buy hundreds of shares at a time.

It's reverse stock splits (e.g., your 30 shares of stock become 15 shares) that are usually a warning sign.

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@asdf

It is a DEVELOPER conference. They had a lot of stuff to announce for developers, with the new iOS 8 features targeted at them, along with the Swift language. Sometimes they've announced products at the developer conference, but that's usually to cover up for when there isn't much going on that would interest developers.

When they want to announce a new product, or the update to the iPhone or whatever they send the press "invitation to a special event" type emails and we have to listen to the press endlessly speculate on what will be announced instead of just waiting a week or two for the actual announcement.

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Re: @asdf

I know I know and Apple like Microsoft still print money (though both look to be a bit stagnant with Microsoft mobile being largely irrelevant and Apple starting to lose some of their hipster flair). Recently as well Apple's "new" yearly OSs feel more like service packs pushed out perhaps with a few new features but mostly to obsolete older hardware.

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Re: @asdf

Obsoleting older hardware?

You mean like how iOS 7 introduced in September 2013 didn't support the 3gs introduced in June 2009? Except that iOS 6.x has received two updates since, the most recent a few months ago, so while the five year old 3gs is no longer gaining any new features it isn't left out in the cold for security issues.

Go find me a SINGLE Android, Windows or Blackberry device dating from 2009 that is still receiving updates from the manufacturer in 2014. Or a single device dating from 2009 that was still receiving updates in 2012, for that matter.

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Trashing yes but he did hit the nail on the head and I guess the truth hurts

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Re: @asdf

"Recently as well Apple's "new" yearly OSs feel more like service packs pushed out perhaps with a few new features but mostly to obsolete older hardware."

It's a yearly OS bump. What do you expect? XP --> Windows 7 every 12 months? Get a grip, man!

This is incremental development. It's somewhere between Facebook's "push out three new versions a day" and "take 5 years to get to the next version" of more traditional development. They are midlevel releases on a yearly basis. Mostly bug fixes, evolutionary improvements, and every few years a major feature (like Siri) will be released.

As to "outdated hardware"...why do you care about hardware? Smartphones today are where PCs were in 2006: "good enough". The year-on-year incremental change in hardware is utterly fucking irrelevant. If you're 2 cores instead of 4, who cares? 4 instead of 8? Oh well! Slightly lower clock? Well, darn! It doesn't matter.

What matters is fitness for purpose...and the iTat does the job, just like WinPho, 'Droid and BBerry.

Achievement unlocked: smartphone mediocrity. We've reached the point where if you want "wow" it's time to invent a new market.

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Windows

Re: @asdf

iTat? Dick.

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Anonymous Coward

One X zero = zero

Seven X zero = zero

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Thankful...

That my mum got the stock on the "cheap" bunches of splits ago. Then again, capital gains taxes are horrendous. Live & learn.

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Re: Thankful...

If you live in the US, you can hardly complain about the capital gains rate, which is pretty low. The way I look at it, the more taxes you pay the less you should complain, because it means you've got more left over after taxes than other people. I've got a friend who complained about his 8 digit tax bill, and was upset when I told if I ever had that I'd go out and celebrate on April 15th because it meant I'd have earned enough that I'd be retired :)

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This just stops the price looking so inflated. Once the cash pile is doled out in dividends then the price will drop. That's all the value is atm: a lot of people just staring at the bank balance and drooling. The have made some very overpriced purchases recently and smartphones in general have saturated some markets. The tablet competition is very healthy with segmentation that even they have been forced to follow. New programming languages are two a penny and do not interest big shareholders. So where can the price go really?

Say the following happened:

- They lose a big patent suit...

- They get knobbled for tax by governments under media pressure...

- They are forced to write off value of some large acquisitions...

All of these things could easily happen in the short term and even all at the same time. Of course, the same could happen to Google. Or Samsung. I think Apple are most vulnerable though. They have built a market on 'cool'. And that tarnishes. Its already happening imo.

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Anonymous Coward

Yeah and Samsung have a market built on Google's software where every man and his dog is making the same phones now. I can see little reason for someone to buy a Samsung over say a Moto G at about half (or less) the cost. Loads of new manufacturers joining the party in the race for zero margins.

Samsung are very much at risk and are now pushing Tizen - really - who is going to buy it over a generic Android these days. Apple still has a very large (and growing), loyal user base and multiple revenue streams - they sell the device, accessories and media.

Plus the simple fact is Apple service is great - the devices are better made, more reliable and yes most of their users really like them - so would they pay a few pounds extra per month for an iPhone - yes.

As for patents - they win some they lose some - it's not really a big deal. The settlements to date amount to a few percent of their cash pile and overpaying for acquisitions - so they bought Beats for 3m - looks pretty small change compared to Google buying Motorola then flogging it off.

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@ AC half an hour ago

No, they bought Beats for $3 BILLION, not $3 million.

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"I can see little reason for someone to buy a Samsung over say a Moto G"

It doesn't matter if you can see the reason or not. People choose Samsung by an overwhelming margin. Samsung are a "name" now. The likes of HTC and Moto are not.

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Voldemort did this already

Apple stockholders are only going to be in trouble if somebody kills Nagini.

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its just....

a way of lowering the barrier to entry. Joe average doesn't have $700 to splurge on his phone companys shares, but maybe $200 or $300 to buy a few every now and then. Cut your cake into 100 pieces or 500 pieces, you've still got the whole cake, right? Its all about accessibility.

Its kind of like ths housing market in the UK. Maybe they think they are in danger of pricing themselves out of the market, or going so high that only companies or investment funds could afford them?

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Re: its just....

You are exactly right. I know someone who often posts stuff about how great the latest Apple campaign is (he works in marketing) and always posts something after an Apple product reveal. He is a big fan. He also sometimes posts about how Facebook is being innovative (no I don't don't get it either). He has bought shares in both companies.

Buying shares in large blue chip mega-companies because you have a personal attachment to them is the absolute last reason to invest in a stock. I suspect however that he is not the only one, so expect there to now be a flood of Apple fans coming in to buy shares that will probably not go anywhere for aaages...except eventually south.

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