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And the question on everyone's lips for the last week has been, "Just what the heck is going on with Apple's stock?" After all, it got as high as $47.50 last week just before Apple announced their fifth consecutive profitable quarter, beat Wall Street's estimates, showed year-over-year revenue growth, and revealed some seriously improved sales numbers and fantastic gross margins. And right after all that great news came out, AAPL plummeted 11 percent the very next day. Okay, sure, a big-name analyst downgraded the stock, alleging that Apple was guilty of "channel-stuffing" to raise the iMac's sales numbers (an allegation that, by the way, several have since refuted), and sure, plenty of investors saw the three-year-high and decided to sell at a tidy profit because a great thing can't last forever. But even since then, Apple's stock price has taken a steady slide into the high thirties. So what's up?
Hey, don't ask us, we just work here. To us, the stock market is this big scary magical thing that behaves randomly and with little to no regard to Things As They Are. But our buddy John Farr over at AppleLinks pointed out something that casts a little light on the most recent decline: Eric Yang's excellent Apple Investors site notes that several Apple executives have filed to exercise their stock options and sell to make some cash. Most notably, head marketing dude Mitch Mandich is selling off a chunk of AAPL, and this might have contributed to the price's decline. Perhaps there's this sense that when even the marketing guys start selling off their stock in their own company, they know something that we all don't.
But, of course, that's probably not an accurate way to interpret the sell-off. Remember that several Apple execs get most of their compensation in the form of stock options, not a paycheck. In order to raise some actual cash instead of just sitting on a big pile of paper, they occasionally need to sell some of their stock. As Apple Investors wisely points out, "the selling should probably be viewed as portfolio diversification rather than signs of lack of confidence in Apple." So, sure, maybe Mitch and the boys want to buy some stock in some other companies. Or maybe they all just want yachts. Who knows? The point is, it's their money, they earned it for a job well done, but they need to sell some stock in order to get it. Now, if that artificially deflates the price of AAPL, well, then that might mean it could be a good time for others to buy. Personally, though, we keep our money well away from the stock market; one minute it's a Magical Money Photocopier, and the next it's a Magical Money Paper-Shredder. Too incomprehensible for us, thank you very much-- we'll just keep feeding the piggy bank.
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