You wouldn’t believe it by the way it trades, but Apple Inc. (NASDAQ:AAPL) actually closed today as the most valuable company in the world. Typically, big blue-chip companies track the market closely, seeing gains that rarely deviate much from the market aside from the occasional big industrywide moves, company announcements, or earnings. Even then, big moves are few and far between.
Apple trading like a penny stock, worth $400 billion
Just take a look at Exxon Mobil Corporation (NYSE:XOM), the company that’s been battling Apple for the crown of world’s largest company. Since Sept. 21, the day Apple Inc. (NASDAQ:AAPL) hit its peak on the back of the iPhone 5′s release, Exxon Mobil Corporation (NYSE:XOM) has moved up or down by more than 2% just four times in 114 trading days.
Compare that to Apple Inc. (NASDAQ:AAPL), which traded up or down by more than 2% during the first three trading days of March. In total, Apple Inc. (NASDAQ:AAPL) has traded up or down by more than 2% in 38 of the last 114 trading days since its Sept. 21 peak. That’s incredible volatility more common of thinly traded penny stocks.
A look at largest movements in both company’s share prices over that time period illustrates how much wilder Apple Inc. (NASDAQ:AAPL)’s swings have been:
It’s fair to point out that Apple Inc. (NASDAQ:AAPL) is a technology stock, which can be a more volatile industry. Also, Apple Inc. (NASDAQ:AAPL) has had a number of analyst downgrades, which can put pressure on a stock. Yet, a fair number of these large moves have been on days with little news aside from rumors.
Big moves, little news
Take for example Dec. 5, when Apple Inc. (NASDAQ:AAPL) fell 6.4%, at the time its worst one-day drop in four years. Two reasons cited for Apple Inc. (NASDAQ:AAPL)’s stumble that day: worries that it was losing smartphone market share to Nokia Corporation (ADR) (NYSE:NOK) in China and IDC’s projection that Apple Inc. (NASDAQ:AAPL)’s tablet market share would slide from 56% in 2011 to 53% in 2012.
While I applaud the journalists who rushed out to dig up the news sending Apple Inc. (NASDAQ:AAPL) down that day, neither made sense. Nokia ended up capturing less than 4% of the Chinese smartphone market last year; Apple Inc. (NASDAQ:AAPL)’s real threat in the country remains Android and its dominant 80%-plus share of smartphones in China. Likewise, while the iPad is a tremendously important product for Apple Inc. (NASDAQ:AAPL), it contributed 21% of the company’s sales last fiscal year. Given that it has lower margins than the iPhone, its earnings impact was even less. To attribute a 6.4% one-day share plunge to the iPad losing 3 percentage points of market share across a year doesn’t make much sense.
On other days of major moves — mostly declines — news has been even sparser, often falling back to the same rumors out of the supply chain, which are either repeats of earlier rumors or coming from questionable sources.
A bizarre market move
Then we have today’s trading. Apple began the day in a familiar recent position: underperforming the market. Yet, shortly after 2:30 the company rocketed from being down 0.8% to up 1.2% in mere minutes amid massive volume while the general market barely moved. Such moves are common for thinly traded smaller stocks, but absent major news are uncommon for major stocks such as Apple Inc. (NASDAQ:AAPL). At the peak of Apple Inc. (NASDAQ:AAPL)’s move at 2:47 p.m., more than $137 million worth of the stock changed hands in a minute as massive buying pushed its shares forward.