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‘People overbelieved in Apple’

Published Nov 16th, 2012 9:40AM EST
Apple Stock Analysis

Wall Street is still crushing Apple (AAPL). The stock is now deep in bear territory, down roughly 25% from the record high it hit just ahead of Apple’s record-breaking iPhone 5 launch in late September. Apple shares closed down more than 2% at $525.62 on Thursday, pushing Apple’s market capitalization below $500 billion for the first time since May. The company just posted a record September quarter, it’s guiding for a record holiday quarter and some analysts expect Apple’s performance to keep soaring. So what’s going on? According to one market watcher, “people overbelieved in Apple.”

“Investors had believed Apple would take over the world, management was flawless, its products were in infinite demand and competition couldn’t make a dent,” DoubleLine Capital portfolio manager  Jeffrey Gundlach told USA Today. “People overbelieved in Apple.” DoubleLine is currently short Apple shares.

USA Today’s Matt Krantz lists a few key items among the reasons for the steep decline in Apple’s stock: “Worry about changes coming with investment taxation,” “realization that losing its visionary founder isn’t something to be ignored,” and “profit compression” that is likely to hit as costs rise and competition increases.

Apple’s stock now sits at its lowest level since February and while Apple bulls are looking for a rebound to start any day now, many aren’t convinced the current dive has bottomed out.

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.