Date
25 March 2017
Apple's loss in market value is about as much as fellow Dow Jones components Boeing and McDonald's are worth in total. Photo: Bloomberg
Apple's loss in market value is about as much as fellow Dow Jones components Boeing and McDonald's are worth in total. Photo: Bloomberg

Apple loses nearly US$100 bln of market value in stock rout

Technology giant Apple Inc. has lost nearly US$100 billion of its market value after it posted disappointing quarterly results in Late June.

The amount is about as much as fellow Dow components Boeing and McDonald’s are worth in total, Reuters reported.

For chief executive Tim Cook, the stock rout means his stake of more than 111 million shares is now worth about US$12.76 billion, compared with nearly US$15 billion at the peak in late April.

The shares fell to a six-month low of US$113.25 on Tuesday, before closing at US$114.64.

Analysts say the sell-off was expected; the stock has gained more than 137 percent since hitting a low in April of 2013.

In addition, more than 5,700 different funds already own the shares, according to Morningstar data.

With Tuesday’s declines, the shares have dropped 13 percent over the last 11 trading days.

“When you get a stock that is over-owned it’s difficult to find that incremental buyer,” said Art Hogan, chief market strategist at Wunderlich Securities in New York. “It’s having its own momentum meltdown.”

The declines have left the iPhone maker’s shares below their 200-day moving average, a measure of the long-term trend in the stock. Shares closed at  on Tuesday.

The last time it closed below the 200-day moving average, in November 2012, the stock was in the midst of a swoon that lasted several more months, finally bottoming out in June 2013.

This week’s drop below the moving average exacerbated selling sentiment.

“For a lot of technical traders that was a sell sign,” said Channing Smith, managing director at Capital Advisors in Tulsa, Oklahoma. A Capital Advisors growth fund owns shares of Apple but reduced its holdings last year.

“The Apple ecosystem has never been stronger but we are in a very mature cycle. We think Apple will be a good stock, not a great stock going forward,” Channing said.

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CG

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