Apple Inc looses $22billion from share value in 2 days

March 17, 2011 - PRLog -- Apple Inc's share price shrank markedly for the second day running. The contraction is due to nervousness over Apple's reliance on Japan as both a market and a component supplier in the wake of the natural disasters affecting that country.

Around US$14 billion dropped off Apple's stock following the technology giant's share status being downgraded from "market outperform" to "market perform". The down-grading, by Alex Gauna of JMP Securities, is not solely due to events in Japan and comes after a marked slowdown in sales growth at Apple's biggest contract manufacturer in Asia.

Gauna explained, "There's a risk of complacency. The sell-side has gotten itself into a game of one-upmanship, [Investors ] should make sure that they're comfortable with the situation ... especially since there's just so much uncertainty right now." Apple shares ended Wednesday down 4.5 percent at 330.01USD, the largest single-day loss in almost nine months, following a 2.3 percent contraction on Tuesday.

Only last week , crowds of fans gathered at Apple outlets to view the launch of the iPad 2 tablet. Since then, in only 2 days , Apple has lost almost $22 billion in share value.

There has been a severe reduction is sales growth at Hon Hai Precision Industry Co Ltd, contract manufacturer and subsidiary of Foxconn. Hon Hai Precision are heavily reliant on Apple's business. The picture is not clear however, with other analysts not in agreement. Brian White of Ticonderoga views the slowdown at Hon Hai as a natural result of the shift in focus toward the iPad 2.

Meanwhile, Oppenheimer analyst Yair Reiner refuted the claim regarding Hon Hai's reliance on Apple business, quantifying the contribution as around one fifth.

Author: Lynn Shaw, Anayst

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