This column originally appeared on Real Money Pro at 11:26 a.m. EST on Feb. 6.
The shares are down from $700 a share to $430 a share based on a confluence of sentiment, supply/demand, technical and fundamental factors:
- The Apple shareholder base turned out to be more transitory and more relative-price-driven than many thought.
- As the stock turned lower, there turned out to be more renters than owners.
- As the stock turned even lower, fund flows turned dramatically.
- Stated simply, Apple's share price morphed from the NBA (nothing but Apple) market to the ABA (anything but Apple) market.
- All the while, the competitive landscape was eroding -- my bear case in September 2012 centered on this argument.
- At first, the second-quarter 2012 earnings miss (which was an outgrowth of greater competition) was ignored because the relative and absolute share price action was so strong.
- As investors refocused on fundamentals, however, the stock price dropped to the current levels (reality bites).
- Predictably, previously bullish Wall Street analysts have turned negative on the shares.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV