The Common Investor Asks – Despite Very Good Financial Results, Why Did The Stock Price of Apple Inc. Plunge?

On July 21 2015, Apple Inc. reported very good financial results for the recent fiscal quarter. The company’s financial performance actually beat analysts’ estimates. Apple Inc. earned USD 1.85 per share (1.81 analysts’ consensus estimate), and had revenues of USD 49.6 Billion (up 33% from last year and better than the 49.4 Billion analysts’ consensus estimate). Following the announcement, the stock price plunged by around 7%. The common investor asks – how did this happen?

Apple Inc. logo
Apple Inc. reports better than expected earnings but stock price tumbles… The common investor asks – market, why did you react that way? Image from Apple Inc.

 

Wall street types may know what’s going on, but the common investor may be scratching his head. I had a conversation with one such investor and tried to explain things the best I can in the simplest way possible.

Continue reading The Common Investor Asks – Despite Very Good Financial Results, Why Did The Stock Price of Apple Inc. Plunge?

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