As soon as the 2013 Q1 earnings were announced by Apple, it was clear that investors weren’t so happy with the missed opportunity to build up revenues, according to expectations, all the exceeding expectations on the earnings per share.
Yet the backlash of these developments occurred during the hours of after-trading after a solid day at the market, where Apple’s shares dropped by 10 percent.
It’s been four years since Apple’s shares began its meteoric rise to the top and its beginnings can be marked by the event where Morgan Stanley reduced its price target from $ 178 to $ 115.
And since Apple is the largest traded company in the world, this drop, in double digits, clearly works out to be a big loss for the company. Yet this doesn’t mean that the value of these shares are going to drop tomorrow as well because it is merely a short-term reaction to disappointing earnings for the quarter.
With that said, it must be pointed out that Apple still made profits amounting to $13.1 billion which is very impressive, to say the least.
If there’s anything that’s true of today’s number (Apple’s earning), analysts managed to get it spot on while investors did not know what to expect. However, the good news is that with the meltdown that has taken place, the volatility that has troubled Apple’s share for a while now will also subside.
Yet it’s true that today’s drop is a significant dent for Apple that has about $196 billion in assets and out of which these assets are a substantial part of the $484 billion market capitalization that the company has built with Tim Cook and Steve Jobs at the helm.