After reaching record highs, Apple stock took an unexpected plunge Thursday. The value of Apple shares had dropped $10 by the time they pulled out of the flash crash about four minutes later. The Apple flash crash resembled the New York Stock Exchange flash crash of May, 2010, which experts are still trying to figure out.
Many don’t understand why Apple’s stock was sold
Apple stock value is expected to only go up, which makes the Apple flash crash a mystery. Until about 1 p.m. Thursday, Apple stock had been selling for about $360 a share. About 1:39 p.m. on Thursday, Apple stock went from $355 a share to $349 a share. In four minutes Apple, a company worth more than $300 billion, lost $10 billion in market capitalization. The trading volume of Apple skyrocketed as the value of Apple shares went down. There was a drop from Wednesday to Thursday in Apple stock of $3.62 or 1.01 percent. Stock went from $358.54 to $354.54. Trading volume for Apple stock Thursday was 33.1 million shares, about twice the volume of Apple shares than any other day this month.
Other unusual Apple stock instances
Without a flash crash, twice the trading volume has been for sale by Apple. There were 60 million shares of Apple stock traded on Jan. 18 when Steve Jobs announced his medical leave. The next day, another 40.5 million shares were traded on the market. The easy explanation was rumors that Steve Jobs was hospitalized.The most recent Apple sell-off was “extraordinarily similar” to the flash crash on the New York Stock Exchange that happened in May, according to Apple stock analyst Andy Zaky.
Apple flash crash cause unknown
Analysts weren’t sure why the Apple flash crash occurred. Rumors indicated it might have something to do with Steve Jobs’ health, but he was seen on Apple’s Cupertino, Calif., campus last week and spotted having lunch at an Indian restaurant in Mountain View Tuesday. Other speculators said perhaps Verizon iPhone sales weren’t as high as expected. However, the iPhone set a record for Verizon sales in the first three hours it was on sale. Analysts also expect Apple could sell between 30 million and 40 million iPads in 2011 for $18 billion to $20 billion in revenue. Shortsellers spreading rumors so they could make a quick buck appears to be the only explanation for the Apple flash crash that anyone can come up with.
Information from
Fortune: http://tech.fortune.cnn.com/2011/02/10/snapshot-of-an-apple-flash-crash/?section=magazines_fortune
IT World: http://itworld.com/business/136653/what-was-behind-thursdays-apple-stock-flash-crash
ZDNet: http://zdnet.com/blog/apple/zaky-on-apples-flash-crash/9520
Seeking Alpha: http://seekingalpha.com/article/252315-the-next-catalysts-for-apple-stock-part-2
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