Product, tax questions hit Apple scrip

Written by New York Times | Updated: Nov 9 2012, 07:45am hrs
Autumn is traditionally the time of year when people start snapping up Apple products. Its also when investors, in anticipation of another blockbuster holiday season from the company, do the same with Apple shares.

But this year, even though Apples iPhones and iPads dont seem to have lost any of their allure for holiday shoppers, its stock is headed straight for the discount rack. On Wednesday, Apples shares slid 3.8%. They outpaced a broader decline in the stock market set off by investors uncertainty about how the outcome of the US presidential election will affect taxes and consumer demand for the types of products Apple sells.

During the campaign, US President Barack Obama proposed raising capital gains tax rates for people earning more than $250,000 to 20% from the existing rate of 15%, and his re-election may have prompted some investors to unload shares in anticipation of a broader sell-off in stocks ahead of a tax increase, analysts said.

Owners of Apple shares would have good reason to fear higher taxes on capital gains. Apple shares have appreciated mightily since 2005 when they were about $35 apiece; they began this year at $411 and peaked at more than $700 in late September.

The drop on Wednesday only added to what has been a grim few weeks for Apple shares, which have fallen more than 20% from that peak, to $558 on Wednesday.

The events also do little to diminish the questions reflecting longer-term concerns with which investors pepper analysts with. How much bigger can Apple with a $525-billion market value, the biggest of any corporation get Wont Apple soon run out of people to sell iPhones, iPad and Macs to

Apples forward price-to-earnings ratio the value of the companys stock divided by its expected earnings per share for the coming year is just under 10. That figure is 14 for Google, 32 for Facebook and 131 for Amazon.

Apple executives have said they still see huge opportunities for the company and it is still growing at a remarkable clip for a company its size.