The stock is in freefall: at the moment AAPL is off $24.50, or 4.3%, to $551.35.
Exactly what is troubling the stock is not clear; I've seen two wildly different explanations.
StreetInsider.com contends the fall relates to clearing firms raising margin requirements for positions in Apple shares. The site says that the firm COR Clearing upped margin requirements for positions in Apple from 30% to 60%. Effectively, that means that margin investors taking positions in the stock have to put up more capital.
But Stifel Nicolaus analyst Aaron Rakers writes in a research note this morning that the rapid fall may be tied to comments that AT&T Mobility CEO Ralph de la Vega made at a technology conference this morning.
"The company highlighted that its iPhone 5 inventory is now in good shape with most stores carrying inventory and online demand also being met," he writes. "AT&T noted that it has sold 6.4 million smartphone during the first two months of the December quarter. We would note that this compares to the company selling 6.1 million during the entire September quarter. AT&T also noted that it now expects total calendar 2012 smartphone sales to be 26 million vs. their prior expectation of approximately 25 million. With AT&T having activated 16.7 million smartphones thus far in 2012, this would imply approximately 9.3 million smartphone activations in Q4 ... We believe this is in focus given that it compares to 9.4 million total smartphone activations in Q4 2011. Of that 9.4 million in the year ago quarter, 7.6 million were iPhone activation[s]."
He notes that AT&T reported that iPhone activations totaled 4.7 million in Q3, up from 3.7 million in Q2. "We would note that iPhones have accounted for on average 77% of AT&T’s smartphone activation over the prior four quarters," he writes. "AT&T noted that its Apple business is growing as strong as ever," he says, but also pointed out that it has"some fantastic Android products." Rakers notes that AT&T also said it has seen good acceptance of new Windows LTE smartphones.
So choose your explanation (or is there another one?); either way, the stock is getting hammered.
Update: So, here are some additional theories on what ails Apple, courtesy of Piper Jaffray's Gene Munster.
- There's a Digitimes article this morning that suggests comments from wireless chipset providers point to upside to Street estimates of 43-45 million iPhones for the December quarter - but a 20% sequential drop in demand for parts for the March quarter. "We believe this 20% decline is to be expected coming off of a launch quarter and do not believe it is an indication of how units might trend in March," he writes. "As an example, if Apple ordered 52 million iPhones from the channel in December and 48 million are sold, that implies a 4 million unit channel fill and 41.5 million units ordered from Apple in March. That would mean 44.5 million units would be available for sale in March, which would mean our 43 million iPhone estimate for March is well within the range of probability."
- Technicals: "Apple's simple 50 day moving average is nearing its 200 day moving average, which is a negative technical sign."
- The margin requirement thing. "While we don't know what percentage of AAPL shares are on bought on margin, we do not believe the requirement change has anything to do with the fundamental health of AAPL."
- Nokia getting a deal with China Mobile (which I noted earlier): "We believe some investors have speculated that China Mobile will carry the Lumia instead of the iPhone. We do not believe this is true and note that China Mobile already carries multiple smartphones from multiple vendors. We continue to expect China Mobile to add the iPhone in the back half of 2013."
Update 2: UBS analyst Steve Milunovich likewise points to the comments from AT&T this morning - which came at a UBS conference. He notes that AT&T's comments imply the carrier's Q4 iPhone sales might be up only 5% year over year.
- He also cites the Nokia/China Mobile deal as a ding to Apple. "The deal is a clear negative for Apple, perhaps giving Win8 phones a first-to-market opportunity to be the Android alternative at the high-end," he writes. "It sounds like China Mobile and Apple are negotiating subsidies; we’ve been concerned that a deal would come on the later side."
- Milunovich tosses in another idea: that Q4 smartphone sales could take a hit from the superstorm. "[W]e do suspect US smartphone sales were impacted by Hurricane Sandy to some degree, perhaps artificially deflating AT&T’s comps," he writes. "Both AT&T and Verizon remarked they had better-than-anticipated year-over-year growth over the holiday weekend, perhaps indicating smartphone demand was pushed out by a couple of weeks.
Apple is now down $27.95, or 4.9%, to $547.90.
