Few days back Apple’s share fell by 6.43 %to about 538.79. This corresponds to $34.8 billion loss. That day the analysts were finding the reasons that resulted in the drop of Apple’s share but they failed to find a reason for this.
We have seen a rise in Apple’s share since the last twelve months. The shares rose by 42.7% due to the launch of two new devices in the market; iPad mini and iPhone 5. With not too many new devices coming in the market and with a new CEO, the chances of volatility increases. A smallest decline can lead to the downfall of the company.When we report about variations in stock we often focus on short term activities of the company. There are few things that might explain the decrease in Apple’s share. Bloomberg is blaming China Mobile, Reuters is blaming taxed=s on capital gain and IDC tablet report whereas Fortune is blaming DigiTimes article for this. It seems that this is a combination of the above mentioned reasons but still no one is sure about this. In case of Apple we can use the strategy of VUCA which can lead to bigger changes in stock. VUCA stands for Volatility, Uncertainty, Complexity, and Ambiguity.
VOLATILITY: In terms of trading volatility means the rate at which the change in price occurs. In the month of November the volatility of Apple was 104%. This much volatility also occurred in the month of May and this was the time when many people predicted that the shares will fall. The prediction turned out to be wrong.
UNCERTAINTY: Apple has changed its product release cycle. This year two devices were released and the updated version of some other devices were released. It is always hard to predict the next device that Apple will launch. The uncertainty can lead to bigger stock movements which mean volatility.
COMPLEXITY: it is difficult to predict the actual worth of Apple. Apple is not performing incredibly well. It seems that Apple is a company which has disappointed people but it has still managed to gain larger profit.
AMBIGUITY: sales can help to indicate the position of company in the market. Now the question arises that whether Apple’s sales are good or not. Samsung is the biggest competitor of Apple. But the sales of ipads and iPhones are still growing.
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