Pandemic panic: How the FAANG have fared so far

Since the end of January, when the World Health Organization declared a global emergency, Apple has fared the worst.

In the past four days of trading, Apple has fallen 11%.

My take: I can’t see anything on the horizon that’s going stop Apple from falling further. Eventually, however, it’s going bungee back.

See also: Apple 3.0 COVID-19 archives.

11 Comments

  1. Kathy Corby said:
    Ha, NFLX up. I guess the idea is we’re all going to stay in and watch TV. Might be right.

    2
    February 25, 2020
  2. Doug Montgomery said:
    Others here may remember better than I do about what happened after the pre-announcement of the miss of fiscal Q1 2019, but I seem to recall that share repurchases were greatly slowed during that quarter.

    Might that be the scenario again? The selloff picked up steam after 10am (when they would have been eligible to begin buying back shares). See no sign of any floor being put in by Luca – they likely know that this is going to move much lower yet especially since their pre-announce was vague.

    0
    February 25, 2020
    • Gregg Thurman said:
      Entirely true.

      There are SEC rules governing buybacks. Apple buying shares using structured buyback agreements that exempt Apple from most of those rules, so essentially Apple is free to buy back when it wants to as long as it adheres to the structured buyback agreements.

      If I’m correct (I seldom am) the average price paid per share may change but the number of shares bought will not.

      From the SEC’s point of view the rules are to prevent firms from exploiting insider information at the expense of small investors (defined by number of shares owned).

      0
      February 25, 2020
  3. David Baraff said:
    I will not be shocked to see AAPL just under $200 sometime in the next 6 months if in fact the pandemic reaches the US and causes major disruption here. If it doesn’t, I still wouldn’t be surprised to see APPL down at $220 or $230 in the next 3 months.

    0
    February 25, 2020
  4. Kathy Corby said:
    Volume profile data on AAPL over the last year indicates some support at levels 280, 265, and 221. As each support level is broken, likely to run pretty quickly down to the next. Major support level of the year is 204. FWIW

    1
    February 25, 2020
  5. Fred Stein said:
    From Feb 23, part of my comment on trading strategies:

    “Trading strategy: Wait patiently for the market and AAPL to settle. The reversal, starting in September 2018, went far below any reasonable level and took a year to recover. Such a reversal will set a chance to sell OOM, out of the money, puts at 12 months or more. Predicting the depth and timing of such a reversal, is beyond me. Don’t rush in.”

    1
    February 25, 2020
  6. John Konopka said:
    It seems that we are still operating in panic mode. The virus doesn’t seem to be as bad as first feared. My guess is that in another month or two it will be better understood and the news will be more consistent. There was a report that 2/3 of the infections were not counted. If so, that makes the virus much less deadly.

    Hard to imagine Apple would drop much lower than it is now without more bad news, but I’m not usually good at that sort of guessing game.

    2
    February 25, 2020
  7. Gregg Thurman said:
    Mainland Asia markets Closed down (on average) about 1.20%.
    Japan/Australia/New Zealand Closed down about 0.50%
    Euro zone trading down (on average) about 1.75%.

    I’m guessing Wednesday US trading will be down about 1.75% with AAPL leading the way.

    0
    February 26, 2020
    • Gregg Thurman said:
      It looks like Asian and Euro Indexes failed as an indicator for US markets. I don’t know if that’s a good thing (trend reversal), or a bad thing (can’t depend on them).

      0
      February 26, 2020
  8. Jacob Feenstra said:
    As I said on another page: All indications are that the poison cup is far from empty. I don’t think that AAPL (and the market in general) has hit bottom yet. Only yesterday (to the day before) I said that the stock could hit $270 or even $250. Now that it is already is down to $288 I think it will be at least down to $250. I so wish I could say differently.

    But yes, with Philip I’ll say, it will bounce back, but it may be a while. This virus thing is causing major havoc and will continue to do so for a while yet.

    0
    February 26, 2020

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