Late Wednesday morning, widely read consumer electronics
posted what it believed to be trustworthy information stating that the iPhone
and Mac OS Leopard would both be delayed several months. This news, however,
was quickly proven to be false, as Apple quickly dispatched a memo reconfirming
that the iPhone and Mac OS Leopard are on track for a June and October release,
Despite the quick retraction, the news already caused a
ripple effect, apparently shaking the confidence of investors. Immediately
following the original news post, shares of Apple Inc. (AAPL) dipped 2.7 percent to
$103.42 as volume hit levels not seen since the announcement of the iPhone.
Regardless of the continued and consistent strong
performance of Apple stock, Wednesday’s unconfirmed whisper of product delays
was enough to push investors to quickly dump lots of AAPL shares, causing the
stock price to plunge.
Conversely, as soon as word spread again that the news was
false, investors who realized the mistake—or those who wished to buy the stock
at an artificially low point—quickly snatched up shares again, raising the
stock back up to nearly where it was prior to the report. Shares of Apple
closed at $107.34, down from its $108.48 opening.
If nothing else, the Apple news story and its quick effect
on AAPL stock is a demonstration on the power of the media and the speed at
which information today travels. Those looking to cash in on what could be a
successful foray into the mobile phone industry might suddenly find themselves
without an immediate need for AAPL stock, should the iPhone be delayed.
As astutely pointed out by Georges Yared, CIO of Yared
Investment Research, in a BloggingStocks
entry, “If there were a delay in the iPhone's release date, the
"expectations" of earnings beats and earnings raises would certainly
get pushed out a quarter or two, so the urgency to be involved with the stock
would lessen ... The game of ‘what if’ can be nerve-wracking as portfolio
managers try to be timely in their purchases. The one thing I can firmly say is
that Apple is a winning investment over the next 3-5 years as it has been the
past three years. The whole beautiful product cycle is still early.”