Given a choice, Apple Inc (NASDAQ:AAPL) would probably label Monday, 1st December, 2014, as being a dark one for the company and for good reason too. The company experienced the biggest drop in its share value, the first to occur over the last three months and the reason is cited as being unusually high selling.
Soon after the opening bell, selling activity in the market touched frenzied levels and 9.51 am, EST, turned out to be the crucial minute during which shares to the tune of 6.7 million were disposed, causing Apple Inc (NASDAQ:AAPL)’s stock to plummet by 3% in that particular minute alone. Over all, it plunged by 6.4 % although as trading progressed, it did manage to recover some of the lost ground.
Several explanations have been put forth to explain this erratic behavior but these are far from being definitive, meaning market observers are completely foxed by this trend. As expressed by Bill Harts, CEO, Modern Markets Initiative –
“The fact is we don’t yet know what caused the drop, and blaming it on HFT is misleading.”
That said, an aspect which is now increasingly coming under the scanner pertains to Apple Inc (NASDAQ:AAPL)’s fundamentals wherein a question mark over its products’ performance could have triggered concern amidst investors, thus causing them to sell.
With Apple shares trading at $116 levels, CNBC questioned Hugh Johnson as to whether it was a good point to make an entry. The chairman of Hugh Johnson Advisors stated categorically that he would wait for a more enticing entry point which he positioned between $100 and $110. There was another expert on the panel, namely Bob Pavlick of Banyan Partners, and when asked about the economy, he concurred that the improvement in economy was expected to have a bullish impact on shares and that this year would be witness to better earnings.
Meanwhile, there were other stocks which tumbled too, although none of them came close to the $40 billion loss borne by Apple Inc (NASDAQ:AAPL).
This article has been written by Vinita Basu.