Login  /  Register  | 3 premium articles left before you must register.

Apple sours as workers drift off amid iPhone slump

By ADAM SATARIANO Bloomberg News

Publication: The Day

Published June 25. 2013 4:00AM
Stock dips below $400 as downward spiral picks up momentum

San Francisco - Apple dipped below $400 for the first time since April as a glut of unsold iPhones prompted Jefferies & Co. to lower its target price, and Global Equities Research said low morale is causing employee departures.

Apple, the world's most valuable technology company, dropped 3.3 percent to $399.78 at 1:09 p.m. in New York. The stock had dropped 22 percent this year before Monday, compared with a 12 percent gain for the Standard & Poor's 500 Index.

The stock has retreated more than 40 percent from a record high in September amid concern about Chief Executive Officer Tim Cook's ability to release a new breakthrough product as the iPhone faces stiffer competition.

Retailers and wireless carriers have twice the normal levels of iPhone inventory, indicating that Apple is selling fewer handsets than expected, Peter Misek, an analyst at Jefferies said. Trip Chowdhry, an analyst at Global Equities, also said morale is low and more Apple employees are seeking work at companies such as Google Inc. and Facebook Inc.

Apple is "a whipping boy of Wall Street right now," Laszlo Birinyi Jr., the founder of Birinyi Associates, said in an interview with Bloomberg Television on Friday.

For the second half of this year, Apple will build a maximum of 85 million iPhones, Misek wrote in a research report, less than his prior estimate for 110 million units. He rates the shares a hold and cut his target price to $405 from $420.

The stock slump is being felt by workers, Chowdhry said.

"Recruiters are seeing more and more employees from Apple applying for jobs at Google, LinkedIn, Face book and even Hewlett-Packard," Chowdhry wrote in a research report.

News by Town

Most Recent Poll
The U.S. is pursuing without success NSA leaker Edward Snowden. What do you think will be the lasting impact of this political intrigue?
I foresee difficult U.S. relations with China and Russia for a long time.
Putin said Mr. Snowden is a free man and I agree with that.
Ironic isn't it? China, Russia and Cuba are the countries where Snowden has been or rumored to want to go.
The U.S. has greater issues that require international cooperation than pursuing the NSA surveillance leaker.
Number of votes: 1068

No current items found