Apple Stops Trading After Massive Loss

Episode 1554 (53:23)


Blaming a weakened economy in China for lackluster sales of the iPhone, Apple's CEO Tim Cook sought to explain their huge drop in stock value this week, and as such, Apple has stopped trading until they figure out what's going on. That's not a good thing, but it's pretty clear that the company hasn't really had a good sales experience over the last quarter or two, and Cook expects the next quarter results to be no better. Leo says it was only last August that Apple became the first company to be worth a trillion dollars. But after losing 10% in value, they have dropped to the #4 company in terms of value. But even then, Apple is expecting a 38% profit margin on $84 Billion in revenue. So the loss is largely theoretical.

But Leo says that they can't just blame China. People aren't buying new phones, they have chosen to update their batteries and keep their existing iPhones. That's because with a price tag of over $1,000, and without a massive improvement in performance, the market is just responding negatively to that $1,000 price tag.