Apple's stock plunges 4.5%, worst drop in nine months as analyst downgrades
Apple Inc. on Wednesday saw its worst share price decline since June, shedding 4.5% of its value as a Wall Street analyst issued a rare downgrade and the broader market slumped alongside.
The world's largest technology company by market value has lost about 6.6% of that value -- or about $19 billion -- in the last two days. That's an about face for the fast-growing stock, which had gained about 10% since the beginning of the year, and which is still up more than 56% since March 2010.
The drop coincided with a downgrade by Alex Gauna of JMP Securities, who lowered his rating on Apple from "market outperform" to simply "market perform," citing weaker sales by one of Apple's main manufacturers, Taiwan-based Hon Hai Precision Industry Co. Hon Hai assembles many Apple devices at its Foxconn plants in China.
Gauna noted that Hon Hai had seen slowing year-over-year sales growth in recent months, dropping from 84% in December to 37% in January and 26% in February. His analysis also noted the potential for disruptions to Apple's supply chain by the ongoing earthquake disaster in Japan.
Japan is among the world's largest manufacturers of flash memory chips that fit into smart phones and tablets, including Apple's recently launched iPad 2, which debuted Friday and may have sold 500,000 units in its first weekend, according to some estimates.
Apple's shares sank $15.42, or 4.5%, to $330.01 on Wednesday, more than double the 2% decline of the average blue-chip stock in the Standard & Poor’s 500 index.
The sell-off left Apple at its lowest price since Jan. 21 and down 9.1% from its record closing high of $363.13 on Feb. 16.
-- David Sarno and Tom Petruno
Photo: mollyali / Flickr