Apple is ‘biggest destroyer of wealth this year’

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Apple stock
Apple stock is leading the way for losing investors money.
Screenshot: Evan Killham/Cult of Mac

We can add another award to Apple’s long list, although the company might not be too happy to accept it: The iPhone maker’s stock lost the most value of any tech company this year.

The news comes out of a study from USA Today that reports a shocking average 14 percent decline in value from 462 tech companies. That drop resulted in total losses of $529 billion, but Cupertino is the lead horseman in this year’s stockpocalypse.

“Gadget maker Apple is the biggest destroyed of wealth this year – chewing through $62.3 billion this year as investors brace for the company this year to morph from a growth engine to a shrinking giant,” says USA Today.

That’s almost 12 percent of the total drop, comparable to the gross domestic product of Uzbekistan.

It’s easy to see why Apple led the way, as it seemed generally impossible to please investors no matter how well the company was doing. Despite posting record profits, including the highest gains in history during its most recent earnings reports, Apple stock has suffered hit after hit. It closed today at $94 per share, the latest in its steady progress down from its all-time high of $133 last spring.

But this trend is affecting more than just Apple stock. Professional-networking site LinkedIn dropped almost 44 percent today alone, a loss of $15.3 billion.

USA Today credits investors’ doubts about continuing growth for the across-the-board drops, which creates something of a self-fulfilling prophecy. Nervous investors buy less, and that pulls values down, which in turn inspires even less confidence in the market. And the future isn’t looking any better; during the Q1 2016 earnings call, Apple head Tim Cook voiced optimism about the company’s future investments in India and China but still tried to manage expectations about its performance in the next quarter.

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  • AAPL.To.Break.$130.Soon>:-)

    I think it basically has to do with hedge fund greed. They’re always running to what they think is going to be the easy money. I’m sure they’ll be back to Apple soon enough.

  • Mike

    It’s called the stock market. It goes up and down.

  • isitjustme

    I believe the honor goes to WS and not Apple.
    As they said there is a disconnect between the stock appl and Apple the company. It is making huge profits and every division earn profits in the billions and which company doesn’t want to be in Apple’s shoes.
    Btw it has $216b in the kitty.

  • TeeJay2000

    Not surprised USA Today comes out this. They have used negative stories directed at Apple as click bait for years.
    With all tech stocks declining now, they will need to reassess who they should target next – like Wall Street greed. The Apple focus is stale.
    Or maybe they can write about how USA Today moved from being a newspaper to being a tabloid?

  • TechnoBuff

    Funny how people expect a different rule and reality when it comes to Apple because they are making money and have a huge stockpile of it.

    It is the stock market and the same rule that applies to everyone applies to Apple too with regards to stock valuation and fluctuation.

    Apple is no exception but rather even more vulnerable.

    • AAPL.To.Break.$130.Soon>:-)

      One would think Apple would be less vulnerable considering the low P/E and the cash stockpile, but the share price remains as fragile as a house of cards. Just a few unconfirmed rumors can suck the value out of Apple. A month in advance before earnings, article after article is written telling about how Apple’s supply chain numbers are being cut while they say hardly anything about other companies’ cutbacks. They’re always looking at Apple months in advance and giving bad news instead of waiting for earnings like they do with other companies. Look at Amazon recently. I kept checking and I never saw any bad news ahead of time. The share price was climbing right up to the earnings call and then after the numbers, the panic struck. Same with LinkedIn. You know darn well shareholders were caught with their pants down. Not an inkling in the news the company was struggling to meet expectations.

      With Apple, they never let the share price run up as they’re pumping bad news weeks ahead of earnings. That really an unfair bias against Apple shareholders. I’m certain that the news media and analysts write more negative articles about Apple than any other tech company around. I think there’s either an anti-Apple conspiracy or people are doing it as a means of obtaining clicks.

      • TechnoBuff

        IYour point about Apple market valuation with regards to its fundamentals are right but anyone trading the market knows that it takes more than good fundamentals, and most times perception and future expectations has a more profound effect on stock price than a presently healthy fundamentals, especially for a company like Apple that thrives on a mix of all the aforementioned.

        Apple is the IPhone Company (75% profit from one single product). Any slowdown or cut in the supply chain or market news regarding the iPhone will affect the company as a whole. It’s all about expectations. Also phones are not necessities or essentials, but rather wants and that plays hugely into the narrative when compared to other companies with just one product line.

        I own apple stock and wish it was heading to the 130s and above but I know Apple will struggle to even hit the 120s this year unless the next iPhone delivers in a revolutionary manner. If not Apple’s stock will languish for a while and no new Ipad refresh or smaller iphone can stop that.

        It is the reality of the market. There is no conspiracy about Apple from anyone, I believe Apple is living in the world it created. No one has the same expectations from Google or other tech companies because they did not create a narrative of being the best company in the world.

  • Stick to tech or football, a basic grasp of how markets work would have made this article hit the trash.

  • komori25

    How many Google lost last WEEK?