Apple stock (AAPL) struggles after iPhone 6, Watch release

Apple's unveiling of the hotly anticipated iPhone 6 and Apple Watch sent Apple stock up almost 3 percentage points, but shares have fallen in the hours since. Why does Apple stock struggle after product launches? 

Andy Wong/AP/File
A man talking on his phone walks into an Apple store in Beijing on Sept. 5. Apple is poised to reveal its next big thing Tuesday, Sept. 9 in a crucial attempt to prove its technological tastemakers still have the power to mesmerize the masses.

The wait is finally over. Apple (AAPL) released its new iPhone 6 Tuesday, along with the long-awaited Apple Watch. 

"I hope you'll agree, they're the best phones you've ever seen," said Tim Cook, Apple's CEO, during the event. Initially, investors seemed to agree.

As of mid-afternoon, immediately after the announcement, the company's shares were up 2.50 percent on the day, putting the stock over the $100 mark. But in the hours since, Apple shares have tumbled 0.38 percent on the day. Historically, Apple stock has struggled immediately after product launches; if you exclude the 8.3 percent increase after the first iPhone was released 2007, shares have fallen an average of more than 1 percent during each subsequent product unveiling, according to data compiled by USA Today

Still, analysts are bullish on the company long-term. "I believe if Apple delivers what everyone says they will deliver – two phones, one watch, mobile payments, iOS 8 and new OS/X – they will have a blockbuster next few months" Ken Dulaney, vice president and analyst at Gartner Research, a technology research firm based in Stanford, Conn., said in an email before Apple's event.

There was a lot of anticipation ahead of today's events. In Manhattan, a line of people waited outside the Apple Store to buy the new iPhone before it was released. Investors are expecting that anticipation will mean huge profit for Apple.

"Investors are probably buying just because they see lines of people in front of the Apple Stores," says Peter Cohan, visiting lecturer in strategy at Babson College. " [But ultimately] it boils down to how many phones analysts expect Apple to sell and whether Apple exceeds those expectations."

Apple stock struggled last week following the release of nude celebrity photographs that were stolen off the iCloud. The release of the photos caused an uproar among users who were worried about the security and privacy of Apple products and sent company shares falling 4.22 percent. 

The next month is important for Apple. On average, Apple's stock falls 1.4 percent in the 30 days after the announcement, and last year shares fell 3.3 percent in the 30 days after the announcement of the iPhone 5S and 5C. So far, Tuesday's market movements are hewing closely to the trend.

“More often than not, the stock has rallied in the month leading up to the event and declined in the one week and one month after the newest iteration was unveiled,” Bespoke co-founder Paul Hickey wrote to clients, according to The Wall Street Journal.

Overall, Apple has had a good year. The stock price has increased more than 25 percent since January of this year. It was doing so well that Apple announced a 7-for-1 stock split to lower the price from $646 to $93. Even if you're an average investor, Apple stock could be a good choice.

"We think investors should stick with Apple despite the potential for a sell-on-the-news reaction [following the unveiling]," UBS analyst Steven Milunovich said in a research note Monday, according to Investor's Business Daily. 

IPhones will be available for purchase Sept. 19.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.