Big companies like Apple, Amazon, TESLA, Facebook and many others, always have something interesting to say or announce. Whether it’s a new product they are launching or a new company policy, you always have to be aware and anticipate potential changes in stock prices. Remember, in online trading, you can benefit even if the price goes down. You just have to predict the right direction. So, stay informed and make your call!
The stock price will not just go up or down based on a new product launch or announcement, but it will adjust accordingly when the product information is publicly available. So, if you know that a certain company is expected to launch a next-generation product soon, the company’s current stock price already reacts to that information.
Therefore, if you assume the product will exceed the market’s expectations when the information is announced, you might try to make an investment at the announcement. But if you think the product will not match the market’s expectations, you might want to shorten the position.
The modern way to announce new tech products is no different than a teaser for a Hollywood blockbuster. Glamorous ceremonies unveil the newest and smartest gadgets taking over the technological world.
Apple’s Art of Introducing New Products to the World
A significant portion of Apple’s market value is related to the reception of its new products. Will the newest iPhone change the game? Will people fall in love with the newest iPad?
The events where product announcements are made are so important to Apple’s marketing that they can change their stock price radically.
Well, statistically, there have been only a few Apple product releases that immediately had the company’s stock price soaring. And still there are day traders who target Apple at the release of each of its products, but quite often, they get disappointed. In the long term, however, each product had an undeniable positive effect on the stock.
Behold – the iPod!
The first iPod was released in November 2001, and for its time, it impressed with the capacity of holding up to 1,000 songs combined with a 10-hour battery life, for the price of $399. Apple’s stock gained only 5 cents on the first day of trading after the product’s release date, but a week later, on November 19, it registered a 6,6% increase closing at $10.00 per share.
iMac and Macbook Changed the Computer World
Another example of highly successful Apple products is the Macbook and iMac computers. The iMac was released in May 1998, with Apple trading at $7.58. Again it did not have an immediate impact on the stock price, but only three months later, the company’s stock soared a healthy 21,6%, closing at $9.22.
Two years after the release of iMac, Apple’s stock price was already $27.53, which is a staggering 263% rise. iMac’s popularity is the ancestor of quality products like the PowerBook G4 and the MacBook Pro, making it possible for them to appear respectively in 2001 and 2006.
The iPad Created the Tablet Market
Another game-changer in Apple’s history is the iPad, announced on January 27, 2010, and first sold at the beginning of April, the same year, basically giving birth to the global tablet market. Once again, Apple’s stock had a very slight increase right after the launch of the product, but only a month later, the company was trading at $266.35 a share. A year after that, it was flying high at $341.19, which is a 43% jump.
The iPhone (Needs No) Introduction
Probably the most revolutionary tech product ever created is the first Apple iPhone. Announced on January 9, 2007, it combined three products: a mobile phone, a widescreen iPod with touch controls, and a breakthrough Internet communications device.
Since the official release in June 2007, it sold almost 270,000 phones in its first 1.25 days on the market. The company then gained only 7 cents mainly because it didn’t match Wall Street’s estimates. But again, only a month later, the stock’s price soared to $141.43, making a 15.9% jump. The iPhone definitely altered the reality of the mobile phone market. As of Q4 2019, the iPhone hаd 17% of market share in mobile phones, with 66% of mobile phone profits.
Other Examples of Influential Announcements
In 2020 there were a lot of examples of company announcements causing shifts in stock prices. In June, Facebook announced new hate speech and fake news policies, which lead to advertisers’ boycott and an 8,3% slump in their shares. An exclusive workout partnership with famous pop star Beyoncé led to a 9% rally in Peloton’s stocks in mid-November. In another example of profitable cooperation, McDonald’s teamed up with Travis Scott making a personalized meal named after the rapper, which also caused an uprise in the fast-food giant’s stock price.
This kind of information is something you should watch out for, especially when we are talking about big tech companies like Apple, Google, Facebook, etc.