Apple Inc. (NASDAQ: AAPL) shares soared over the $531.21 (2:38pm est) mark today in trading as investors bought them up following the publication a weekend edition Barron’s article calling them “cheap.” On Saturday writer Tiernan Ray cited rising earnings and the momentum pushing them down as ample opportunity to snap up stock while it was “30 percent off of its high,” and also noted that a similar devaluation process occurred and was blamed on potential for decreased profit margin when the second generation iPhone was released.
Ray also mentions that a phenomenon that is now being dubbed “the Reverse January Effect” as a major cause for devaluation. It turns out that scores of people scrambling to avoid capital gains tax really can depress an otherwise healthy holding. Citing his colleague Jack Hough and CNBC’s Jim Cramer, Ray went on to say “Apple’s shares look attractive” and the company’s shares will eventually rebound if it refocuses on what it does best, making great products that generate huge amounts of money.”
While most investors hope that the Friday closing price of $509.41 is a low that won’t be repeated, the Silicon Valley/San Jose business journal came up with the general list as to why Apple Inc. (NASDAQ: AAPL) shares were so low citing the fiscal cliff, analyst pressure and not surprisingly, but more forthcomingly than most analysts uncharacteristic missteps like the Maps debacle.
So what will the next step be? It could be that the up and down devaluation game continues. Jay Yarrow of Business insider reports that Apple might be on target to sell the 48 – 50 million iPhones it will need to prove bearish analyst estimates wrong even with a decrease in unit production in wake of less Chinese demand citing a Kantar reported stat that shows U.S. market share is at an all-time high.
Yarrow has jumped on the Piper Jaffray and therefore Gene Munster (one of the few analysts who refuses to cut his price target) bandwagon, stating that Apple needs a really juicy rumor in order to keep the momentum going.
According to Yarrow, Munster accurately attributes a great deal of Apple Inc. (NASDAQ: AAPL)’s success its first five years in the smartphone game to the ever-churning rumor mill that generates the firm a great deal of PR on both the positive and negative side of the spectrum. And the rumors do fly, though lately there’s not much to speculate out of them.
In the past week we’ve had a curved glass patent, rumors of a watch and now we have two Apple developers applying for a stylus patent even though Steve Jobs outright decried their use on any truly functional device in 2010. Maybe the development occurred just to have something to counter Samsung’s Galaxy Note with in the future, but the move seems to counter Apple’s normal penchant for intuitive design that defines a platform.
It might be why the firm still needs a new innovation more than ever. It’s the promises on which Apple might deliver that tend to keep it afloat.