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How iPhone launches affect the price of Apple stock
With Apple's iPhone event about a day away, we can expect new iPhones to hit store shelves in just a few weeks. While a few rumors have pointed to a September 20 launch date, we'll have to wait until tomorrow to know for certain. Either way, an iPhone launch is steadily approaching. That being the case, Chris Whitmore of Deutsche Bank recently issued a research note to clients tracking the performance of Apple shares in the wake of each iPhone launch. Whitmore found that shares of Apple increased following each iPhone launch, save for two. The two exceptions were the iPhone 3G -- which hit the market as the US was on the brink of an economic crisis -- and the iPhone 5. Keep in mind that Apple's stock price is influenced by a large number of factors. Consequently, investors shouldn't take the above chart to mean that shares of Apple will undoubtedly increase over the next few months. Indeed, anyone who has tracked shares of Apple knows that the company's stock price is subject to wild fluctuations that often defy logical explanation.
Icahn reportedly invested over $1.5 billion in Apple, stake in company still less than 1%
While initial reports indicated that billionaire investor Carl Icahn invested US$1 billion in Apple stock, the Wall Street Journal is now reporting that Icahn may have put more than $1.5 billion into Apple. Recall that shares of Apple skyrocketed by over 20 points yesterday following word of Icahn's huge investment. In two separate tweets sent out yesterday, Icahn exclaimed that shares of Apple were extremely undervalued while also mentioning that he had a conversation with Apple CEO Tim Cook about the potential for a larger stock buyback. "This is a no-brainer to go buy stock in a company that can go borrow" at a low rate, Mr. Icahn said in an interview. "Buy the company here and even without earnings growth, we think it ought to be worth $625. In case you're unfamiliar with Icahn, he has a well-deserved reputation as a corporate agitator, or activist investor if you're inclined to be politically correct. Specifically, Icahn has a track record of investing heavily in companies and leveraging his large ownership position to demand the change that he wants. While some folks have expressed concern about Icahn investing heavily in Apple and getting all chummy with Cook, there's really nothing to worry about. The Wall Street Journal notes: Wielding influence at Apple won't be easy, or inexpensive, given a stock market value that currently stands at close to $450 billion. At that capitalization, Mr. Icahn's stake would be less than 1 percent. Meanwhile, shares of Apple are still thriving in the wake of Icahn's investment. In early trading today, shares of Apple are up nearly 10 points as the stock inches closer to $500. Just three weeks ago, Apple shares were trading at $418. Per usual, it's a wild ride for Apple investors.
ITC's ban of certain Samsung devices boosts Apple market cap
Propelled by a favorable ITC ruling last Friday, shares of Apple shot up by US$12.91 on Monday, finishing the trading day at $467.36. Indeed, shares of Apple on Monday closed at their second highest level since February of 2013. Though the success of the iPhone is routinely measured against Android as a whole, the reality is that Samsung's fleet of Android phones remain Apple's biggest competition. To that end, investors reacted favorably to an ITC ruling this past Friday which handed down an import ban against certain Samsung smartphones found to infringe upon Apple patents. AppleInsider reports: Last Monday, news of the veto announced over the previous weekend sent Apple's stock up $6.91 or 1.49 percent, enough to raise Apple's market capitalization by just over $6.9 billion, a figure as large as Apple's most recently reported quarterly net income. Yesterday, Apple's market cap shot up by $11.7 billion. As for the Samsung import ban, it will go into effect in 60 days, barring a rare presidential veto. Apple, you may recall, was recently the recipient of a presidential veto with respect to an import ban that would have affected older-generation iPhones and iPads. The odds that Samsung will be as lucky appear to be extremely slim given the types of patents involved in the case. Remember that Samsung has routinely wielded standard essential patents against Apple whereas Apple has asserted patents that they are under no obligation to license to Samsung.
AAPL could hit $410 according to R.W. Baird analyst
If only this blogger had held onto that Apple stock that was bought for about $8 while dabbling in the market in the late-1990s. Instead the profits from selling it at $27 a share were put into such wise investments as Webvan. The only good thing about my dot com bubble investing period is that only a small chunk of money was set aside to play with and no more was added. On the other hand if I had just had more patience and stayed in Apple, I'd have a very nice chunk of change with it now trading at over $317 per share and likely to go much higher. According to a recent Associated Press article, William V. Power, an analyst with R.W. Baird is projecting that AAPL shares will be trading at as much as $410 before long and he is not alone. Numerous analysts have projected $400+ for Apple and the average of 38 different projections is $370.50. The key to that continued growth according to Power is the iPhone which currently only commands about three percent of global mobile phone sales. As smartphones grab an ever larger stake of the handset market, Apple and its prime competitors, Android and Windows Phone 7 are all likely to see big gains in the next few years and that will certainly help Apple's bottom line and stock price.
Let's talk AAPL and the future
It's been a roller coaster ride over the past two years for Apple (AAPL) stock. In December 2007 it hit a then-peak of $199.83 a share. Just two months later AAPL sunk to $125. Three months after that it had recovered to the $180s, but by November 2008, AAPL had plummeted to $82 a share. Since then, the stock has recovered and hit an all-time closing high of $207 on November 17, 2009. As of today it's sitting pretty in the $190s -- though some think the drop from the $200s to $190s is suspicious. I argue with people all the time why Apple didn't deserve its dips and plummets over the last two years: The company is sitting flush with $23.5 billion $35 billion in the bank, in cash (about the same as the total market value of another major US computer maker, named for its CEO and founder, who 12 years ago famously suggested shutting down Apple and giving the money back to shareholders). It has zero debt. It is one of the most respected companies on the planet and has the world's greatest CEO. But more importantly than the cash and its status, I believe AAPL is a great buy because it has such small market share in all the categories it operates in save one...
