Apple’s status as the world’s most valuable company slipped away on January 25, after a major stock decline, as written by the New York Post.
Prior to its deterioration, Apple was known as the world’s most valuable company for twelve months. The technology giant passed Exxon in January 2012 after a year of major sales and profits. Now, Apple’s stock is the same as it was when they first overcame Exxon, and the energy company has passed Apple to regain its former title. “You have one company that had pretty high expectations for it for the future and you have Exxon that continues to chip away slow and steady,” stated Jason Cooper, a money manager for 1st Source Investment Advisers.
Apple shares fell 2.4 percent on January 25, leaving it with a $413.1 billion market cap (which is the number of shares outstanding multiplied by the stock price.) According to the New York Post, Exxon had a market cap of $418.2 billion. Overall, Apple has had a 37% decline.
Apple’s stock began to fall after the release of the iPhone 5 and the iPad Mini. According to the New York Post, it quickly became apparent that Apple had serious competition from companies like Samsung.
The CEO of Apple, Tim Cook, stated that his company couldn’t produce enough iPhones, iPods, and Macbooks to keep up with consumer demands during the holiday season. The Associated Press also reported that Apple showed record sales and revenue over the holidays. Nevertheless, their sales did not meet expectations.
“The company is at a bit of a crossroads. It’s gone from launching big hit products where they didn’t have to look at the competitive landscape-they just did their own thing-and the growth meant they didn’t have to focus on the whims of Wall Street,” Stuart Jeffrey, an analyst at Nomura Securities, told the Associated Press.
An article from the Associated Press stated that Apple may not be able to get their stock back to where it was. Various analysts believe that the company will have trouble winning back the investors who initially boosted their stock. However, Apple may be able to fix its stock by trying to appeal to different investors.
Jeffrey told the Associated Press that Apple needs to work quickly to find new investors. He explained that the people who invest in rising stock have left Apple behind, and the company hasn’t worked to appeal to value and income investors. Another analyst, Brian White, said that this means Apple has no “safety net” if their stock continues to fall.
Apple has begun to utilize cash to buy back shares, which is a way to reward investors. This may help the company’s stock rise. The Associated Press reported that this move is a “step in the right direction” for Apple.