Apple Inc.(NASDAQ:AAPL) shares slid southwards on
Wednesday and again in today’s session, the day when President Barack Obama was
re-elected for a second term with a convincing majority.
Apple shares were down nearly 4 percent, falling more
than the broader market which were worried about the `fiscal cliff' in the U.S.
economy. This morning the stock opened slightly higher, but now down 2% to $
547.97.
In Apple's case the worry was about how the
presidential election will impact tax rates and consumer demand for Apple's
products.
Apple products have generally been resistant to prices
in the sense that people have bought its smartphones and tablets even if they
have been highly priced compared to other similar devices.
However during his campaign Obama had said that he
intended to raise capital gains tax rate to 20 percent for those whose annual
income was above 250,000, up from the current rate of 15 percent.
Analysts are speculating that this may be a reason for
the sell-off in the stock as investors would be anticaking being taxed at a
higher rate if they held on now and sold later.
The New York Times, which analysed the issue 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.
There is already some concern in the market about how
much growth the company can sustain and whether it would run out of people to
sell products to.
No comments:
Post a Comment