Did you buy Apple stock recently? If yes, we're sorry. Because on Thursday, Apple stock plummeted a gut-wrenching 12 percent. That amounts to $52 billion of money that's just gone. Derek Thompson at The Atlantic does a good job of putting it into perspective. The staggering amount of money that Apple lost on January 24 is greater than the market value of such valuable companies as Starbucks, Target, Nike and Time Warner. That $52 billion of vaporized capital is nearly 20 percent more than market cap of Morgan Stanley. Morgan Stanley! Money is what these guys do! But alas, Apple had a bad day. And since they're the world's most valuable company, the very scale of bad quickly becomes terrible, turns into horrible, feels like no good and winds up, well, historically bad. Apple's stock has never seen such a dreadful one-day dollar drop. Ever.
What happened? Well, to oversimplify things -- which can be Wall Street's modus operandi sometimes -- Apple had a bad earnings report on Wednesday, and the backlash stretched into Thursday. It wasn't an awful earnings report. Despite reports that iPhone sales were waning so seriously that Apple had to cancel orders for the components, Apple did sell a lot of iPhones last quarter, 47.8 million to be exact. The company did fall short of Wall Street's expectations when it came to revenue, though, and profit was flat. Again, it wasn't so bad that the company's going under or anything. Apple made $13.1 billion last quarter, which is roughly what Chipotle is worth.
Chief Financial Officer Peter Oppenheimer had a good excuse, though! "In recent years, our guidance reflected a conservative point estimate, or results every quarter that we have reasonable confidence in achieving," said the executive. "Going forward, we plan to provide a range of guidance that reflect our belief of what we are likely to achieve." Good plan, Peter. For now, though, you're going to have to suffer Wall Street's being disappointed with Apple's missing its expectations, and, guess what, it's going to be expensive. For everyone.
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