Apple stock plunges 22%, $500bn eroded in market cap: Report
A broad sell-off in the overall tech sector amid an ‘underwhelming product launch event this week has resulted in Apple stock plunging nearly 22 per cent from its intraday record high of $137.98 on September 2, losing around $532 billion in market value.
According to a CNBC report, it took just 12 trading sessions for Apple to plunge more than 20 per cent from its all-time high, giving up more than half a trillion in market capitalisation.
The iPhone maker last month scripted history by becoming the first American company to touch $2 trillion in valuation.
Earlier this month, the market cap of Apple touched $2.3 trillion, surpassing the entire value of all the companies in the Financial Times Stock Exchange 100 Index, also called the FTSE 100 which is the UK’s top share index.
While Apple’s market value was around $2.3 trillion (1.7 trillion pounds), all the companies in the FTSE 100 had a combined value of 1.5 trillion pounds.
Demand for Apple’s shares reportedly boosted by the company’s decision to divide its shares to make it easier for individuals to invest in the company. Apple’s board of directors had approved a four-for-one stock split, effective from August 31.
But things dramatically changed afterwards.
The company this week announced new hardware and updated software, including the Apple Watch Series 6, the iPad Air, a fitness service and service bundles called Apple One.
However, Apple did not announce any new iPhones.
Toni Sacconaghi, senior research analyst at Bernstein, called the event “relatively underwhelming.”
“We believe it could be difficult to move users from competitive music, video or gaming services, where they are often entrenched,” Sacconaghi said in a note.
“We continue to believe that Apple should look to more creatively bundle its hardware + services into integrated subscription bundles.”
Gene Munster from Loup Venture, however, was quoted as saying that the key takeaway from the Apple event is how the company is “masterfully upselling its consumers.”
The iPhone maker passed the $1 trillion mark for the first time nearly two years ago.