Apple CEO Tim Cook made a rare move today by responding to an email from CNBC’s Jim Cramer. Cook’s letter, a copy of which was obtained by Business Insider, addresses the company’s quarter so far and basically says that everything’s fine with Apple’s business and performance in China.
Apple’s stock has been declining since the company’s June quarter earnings showed iPhone sales coming slightly below investors’ expectations. This morning, $AAPL fell below $100 amid bigger stock market woes as most indices are in the red today.
Here’s Cook’s email in its entirety:
As you know, we don’t give mid-quarter updates and we rarely comment on moves in Apple stock. But I know your question is on the minds of many investors.
I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August. Growth in iPhone activation has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last two weeks.
Obviously, I can’t predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe that China represents an unprecedented opportunity over the long term as LTE penetration is very low and most importantly the growth of the middle class over the next several years will be huge.
However, it’s precisely that middle-class that’s been hammered by the economic slowdown in China, the world’s top market for smartphones.
Slowing economy has prompted the Chinese government to unexpectedly devaluate the yuan currency twice in the past few weeks, a move that triggered a wider sell-off across the markets.
Shares of Apple are currently down about six percent amid a wider Dow Jones and stock market downturn. $AAPL closed at $105.76 on Friday but tanked below $100 in pre-market trading today. The last time the shares fell below $100 was in October of last year. In June 2014, Apple announced a 7-for-1 stock split.
The shares are down over $35 from a 52-week high of $134.54 on April 28. As the markets opened for the today, shares of Apple were trading at about $95.
“I think it’s a classic fear of the unknown,” Piper Jaffray analyst Gene Munster recently said. “In this case specifically it’s the fear of what’s happening in China. Investors appear to be concerned about what the impact is from China, and if that ends up translating to more broader concerns or a slowdown from consumers.”
Apple is said to be holding an iPhone event in September and with new iPhones, iPads and possibly a next-generation Apple TV on the horizon in time for the holiday season, Apple should be able to assuage the fears of weakening performance.
Source: Business Insider