Apple Inc. (AAPL): Foxconn Freeze Affecting Stock Price?

Apple Inc. (NASDAQ:AAPL) stock, which already took a huge hit last month when its earnings report came in as “disappointing” (where an all-time best in revenue is somehow disappointing is a topic for another day), the stock has slid a little bit more the last couple days when some news came out Wednesday that the company’s largest supplier of components for devices, China-based Foxconn, was imposing a hiring freeze for at least a month – which goes against what the company has traditionally done about this time every prior year.

The Apple Inc. (NASDAQ:AAPL) stock is taking the hit, but why? There seems to be two conflicting report as to the reason for the freeze. The Financial Times reports it one way, while Bloomberg takes a different tack. Should either reason affect Apple stock, or is this just reaction to misinformation?

Apple Inc. (NASDAQ:AAPL)Both the Financial Times and Bloomberg agree on the initial news report that revealed that Foxconn, which provides components for several tech companies – but is the biggest supplier for Apple – but the two news outlets provide different reasons for the freeze. The Financial Times cites anonymous sources in its story, suggesting that Apple Inc. (NASDAQ:AAPL) has lowered it orders for components for the iPhone 5 due to dropping sales demand. “Foxconn’s demand for workers this year was as low as that in 2009,” a source said in the Financial Times piece.

On the other hand, Bloomberg cited in its report that the freeze is simply because the company has seen much higher employee retention following the Chinese New Year. Foxconn has generally seen about 75 to 80 percent of their workers return following the Lunar New Year break in past years, but the company is reporting employee retention this time of more than 90 percent. Foxconn has increased wages and lowered work hours in recent months after audits from Apple and some labor rights groups who have been pushing for better work conditions.

What do you think? Why is Apple Inc. (NASDAQ:AAPL) taking a hit with its stock? Is there good reason – is the hiring freeze due to iPhone 5 orders, employee retention, or both? Let us know your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

Please see these related AAPL articles:

Can Apple Really Buy Dell?

A Low-Cost iPhone Market Opportunity

A New Apple Patent Suggests a Smartwatch?

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!