[tkmd]

As usual the value of AAPL rose during the keynote speech when SJ eluded to fantastic ipod sales. It jumped something like three dollars. the earning report for Q4 is due in 15 minutes so I figure I'd check the AAPL. In the last 30 minutes the stock has fallen 7 (!) dollars. WTF? Any clue as to why ?

[xi_hyperon]

The markets in general are down today, perhaps due in part as reaction to the mess in the Japanese stock market, and perhaps also because Intel is down too.

[Goldfinger]

Originally Posted by tkmd

As usual the value of AAPL rose during the keynote speech when SJ eluded to fantastic ipod sales. It jumped something like three dollars. the earning report for Q4 is due in 15 minutes so I figure I'd check the AAPL. In the last 30 minutes the stock has fallen 7 (!) dollars. WTF? Any clue as to why ?

Because the stock is higher than it should be.

[Monique]

You are kidding right the stock are over 80 dollars and at one point they were at 16 dollars not too long ago.

[Dork.]

I thought this was going to happen. When Steve talked about all the iPods they sold in this quarter at Macworld, my first thought was that they must have some bad news coming in the earnings report. And there's not really bad news, just a lower forecast for the next quarter.

When a company trades at a high price relative to earnings (Apple's current P/E is 53 based on today's closing price according to Yahoo!), it means that investors are betting that there will be future earnings growth in the company. So whenever a company reduces the forecast for the next quarter, the investors who are only looking that far bail out.

I wouldn't worry too much, though. If they can sell lots of IntelliMacs this coming year, then the stock may yet double again before 2007. Even after the slight dip after-hours today, Steve's 10 million restricted stock grant (that vests in a few months' time) are still worth more than 770 million!

[Dork.]

Originally Posted by Monique

You are kidding right the stock are over 80 dollars and at one point they were at 16 dollars not too long ago.

Lookie here....

[turtle777]

Originally Posted by Dork.

Apple's current P/E is 53 based on today's closing price according to Yahoo

Way too high. It can't just continue to go up like that.

[Dork.]

Well, it's like I said: investors are expecting earnings growth in the future. Yahoo's P/E calculation is based on earnings numbers from the past year. If you think future earnings are going to be much higher, you'll pay a premium.

Apple's story is more than just the P/E, though: they have no debt, are cash flow positive, and almost $10/share in cash in the bank.

[production_coordinator]

Actually, it's rather common for Apple's stock to fall after a keynote... not rise.

Good news does NOT mean that their stock will go up.

[Big Mac]

The only reason the stock fell in extended hours trading was not because of current quarter out performance but because of soft guidance for Q2, which is historically soft. Jobs obviously wants to reduce expectations. It's also important to note the price has already recovered significantly.

[Andy8]

The whole market is down, all markets in fact, do not be surprised if it dips a little more tomorrow. But then the buying will start again, so little need to worry.