Apple share price dropped 10 percent today after its revenues came up short of analyst estimates and sales of its macs and iPhones were not what Wall street expected. Still, Apple sold 47.8 million iPhones, a record, and 22.9 million iPads. The company also projected a softer-than-expected revenue range of $41 billion to $43 billion for its current quarter, below the more than $45 billion expected by analysts.
I just do not understand people who invest in the stock market, even in a company trading at over $500 per share! You have to be very rich to invest in Apple at that share price, and the assumption, apparently wrong, is that rich people are smart. Or perhaps, can think logically is more like it.
I may be the stupid one, but I would think that if a company sells more iPhones than it ever did before, setting a new record, and sells $43 BILLON, yes that is with 12 zeros, $43,000,000,000 that just can’t be bad enough to instigate a mass selloff and drop the stock price by 10%.
Yet somehow investors in the stock market, big funds and small investors, all felt it was a terrible thing that some analysts, which are just some guys who do not work for the company but simply take a best guess at what they think the sales will be, were wrong.
This happens constantly with stocks on the market. The analysts expect something and then the company does not meet that estimate, even though it still is growing, the price of the shares drop. It is just not fair to the company.
It should be the analysts who people loose confidence in, not the company that makes more sales than they ever did before.
If there were no analysts to make their estimates which are often far from what the company actually did, even if that was much better than last quarter, the stock market, and the economy in general, would be far more stable.