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Apple shares dip below $400 for first time since 2011

Shares of Apple Inc. today dipped below the $400 (U.S.) level for the first time since 2011, as investors lost further confidence in the tech giant after a supplier hinted of a slowdown in iPhone and iPad production.

Shares closed just above the $400 level, at $402.80 - for a one-day a loss of $23.44, or 5.5 per cent. Near midday, they slipped as low as $398.11. That was the lowest since December of 2011 and a remarkable fall from a high of $705 back in September of last year. This week alone, shares are down more than 6 per cent.

Volume has been much heavier than usual, with more than 23 million shares exchanging hands by early afternoon Wednesday, compared to average volume over the past three months of 17 million.

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Investors grew worried about the stock Wednesday after Cirrus Logic Inc., which supplies audio chips for the iPhone and iPad, said sales of a particular chip are slowing down as a customer moves to a newer component.

Some analysts are suggesting that the Cirrus' news may mean a big decline in Apple sales in the April to June period.

Also hurting confidence in Apple today were a couple of research reports from Goldman Sachs and Bernstein Research that were previewing the company's fiscal second-quarter earnings report on Tuesday.

Both analysts were doubtful that Apple will announce a dividend hike, a share buyback or a change in its capital allocation strategy.

"While there has been some hope that Apple will announce its new capital allocation plan during its earnings call, we believe it is more likely that Apple will make this announcement on a separate date, with a separate conference call," Goldman analyst Bill Shope said, according to MarketWatch.

He also echoed recent comments from several other analysts that Apple sales should slow considerably in anticipation of new products later this year.

Bernstein Research analyst Toni Sacconaghi said he anticipated a "tepid quarter and downward revisions" to Apple's outlook in next week's report.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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