Wednesday, December 5, 2012

Apple Inc. (NASDAQ:AAPL) Shares Tumble On High Volume On Multiple Concerns

Apple Inc.(NASDAQ:AAPL)’s shares tumbled by almost 5% on Wednesday, completing a dreary ten weeks period for the most valuable company in the US. Analysts are citing factors like increasing competition in the tablet industry.

The stock was amongst the biggest percentage losers on the S&P. it dropped 5.2% to $545.56 at some point when over 17 million shares had changed hands, putting it on track to exceed the average daily volume of the company over 50 days of 21 million shares.

The enormous size of the stock implied the retreat was responsible for 2/3rds of the 1.1% drop in the Nasdaq 100 Index on Wednesday.

Analysts gave dissimilar reasons for the drop. Some even quoted a research report and said that the company will lose share in the tablet-computer industry in the coming year. Others quoted reports of upper margin requirements at clearing companies and a number of shareholders said vague tax rates on capital gains in 2013 prompted sales.

Director at Performance Trust Capital Partners, Brian Battle said that based on what happens with US fiscal negotiations, rates could face a hike or they may stay the same. They are not likely to be lower. Hence, an investor, who has seen profits in Apple, can o ahead and take such profits this year itself.

Apple is still up 36% so far in 2012, but it has been weak lately. The stock is down about 22% from its all-time high of $705.07 per share of 21st September.

A Hudson Square Research analyst, Daniel Ernst said that Apple stock is exceptionally more unstable than its earnings stream.

He does not find any sense in the instability since there are customers queuing up in front of the company stores all over the world.

International Data Corp said on Wednesday that Apple is likely to lose market share in the tablet-computer industry for the entire 2012, with customers choosing Google’s Android over Apple’s iPads.

Also putting pressure is clearing firms are raising their margin requirements for positions due to fears of being too heavily concentrated in the $526B company. One firm, COR Clearing, raised its margin requirement to 60% from 30%.

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