Sep 06 2007
Boy – was I lucky or what? I’m referring to my decision yesterday to lock-in profit on Apple Inc.’s (Nasdaq: AAPL, stock) trade. I’ve put in my thought why I close the position on AAPL Oct 130 Call in my entry at “Taking Money off the Table before Apple Special Event”.
And so Apple plunged more than 5 percent after the whole so-called “Special Event” which started at 1:00 E.T. ended, closing at $136.76, down a whopping $7.40 (in extended trading, it lost another $1.01). The reason – Apple Inc. slashed the price of the top iPhone by $200 to bolster holiday sales, surprising almost all investors as the steep price cut was done in less than three months after the iPhone’s launch.
While this angered loyal customers who paid top dollar for the cool iPhone since it launched, investors were seen punching their keyboards in lightning speed selling Apple’s shares with anticipation of lower profit from the iPhone’s sales. The 8-gigabyte iPhone will now cost $399 – one-third cheaper than when it went on sale in June 29. The 4-gigabyte iPhone, which sold for $499, however will be phased out.The good news – anyone who purchased an iPhone within the past 14 days can get a refund under Apple’s return policy – only if the item is unopened. The policy also allows for a refund of the price difference if a product was purchased within 14 days of a price cut and the owner has the original receipt.
Analysts pointed out that Apple is starting to learn the business of selling cell phone. Considering the world’s best-selling cell phone, Motorola Razr, was debuted at $499 initially but can now be bought for less than $100, the cell phone sector is a totally different ball-game to Apple Inc. Maybe quantity is what Steve Jobs trying to achieve when he was quick to add that the company is on its way to selling 1 million iPhones in the United States by the end of September.
Meanwhile, the company also revamped its iPod media player lineup, introducing a model called iPod Touch that incorporates the iPhone’s touch-screen and adds the ability to wirelessly download songs directly. It introduced a new version of the best-selling iPod, the Nano, which plays video – reported AP.The iPod Touch is less than a third of an inch thick, thinner than the iPhone, and with the Safari Web browser will offer quick access to Google, Yahoo and YouTube. Announcing a partnership with Starbucks (Nasdaq: SBUX, stock), the coffee chain will let iPod Touch and iPhone users have automatic free Wi-Fi access to search for or buy digital tunes featured in U.S Starbucks stores that offer wireless Internet access.
For those traders who have been watching the Apple’s stock behavior after yesterday’s Special Event and had opened new position on Option Put, you have all the reasons to smile now *evil grin*.
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September 6th, 2007 by financetwitter
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