Apple, Inc. stock shares had a rough day on Wall Street yesterday – in fact, their worst day in four years. Apple lost more than just money, though (a 12 percent decline in stock price and a $50 billion decline in market capitalization). Apple also lost its proud title as the most valuable company in the world.
Because of the one-afternoon decline, Apple is no longer the most valuable publicly-traded company on Earth. At roughly 1 p.m. ET Friday afternoon, Exxon took over the top spot again. Exxon? Boy, that is just not very sexy.
After just a one-day dip in stock price, Apple is no longer the world's most valuable company. The sell-off occurred after Apple announced lower-than-expected fourth quarter profits from 2012 in Wednesday's quarterly earnings call. Profits and sales were both at an all-time high -- but not all-time high enough for Wall Street's expectations.
"If this was any other company, we'd be breaking out champagne," Dow Jones analyst Howard Silverblatt told the Los Angeles Times.
The obvious irony here will not escape you. Apple stock took a nosedive even though the company had its best quarter in history. They generated a staggering $54 billion in sales, and sold 75 million devices over the three-month period. Of those, 50 million were iPhones. People, that is nearly 17 million iPhones per month. So what's the problem?
Apple's problem is that Wall Street analysts had identified the tech giant as a tree that was going to grow to the sky, and beyond. Apple stock peaked at $702.10 per share on September 19, with nothing but rosy predictions ahead. But before Thursday's sell-off, the stock was hovering around $515 per share. The stock looks likely to close at around $440 when the market closes Friday.
In other words, Apple's problem is the current direction of the blue line on this chart of Apple's stock price over the last 12 months.
Does this mean Apple is finished? Hardly. For all we know, they could take the top most-valuable-company spot back from Exxon in the next couple of days. "(Apple) is an active stock, and there's a lot of professional traders in there, so it's definitely volatile," Mr. Silverblatt told the Wall Street Journal.
Coincidentally, Apple overtook Exxon as the most valuable company in the world exactly one year ago -- the day after their Q4 2011 earnings call.
If you're keeping score at home, your five most valuable publicly-traded companies in the world are now:
1. Exxon ($417 billion)
2. Apple ($413 billion)
3. Google ($248 billion)
4. Berkshire Hathway ($241 billion)
5. Wal-Mart ($233 billion)