Reviewing Apple Price Changes Before Significant Events - Part 2

Feb.19.12 | About: Apple Inc. (AAPL)

Recently I posted this article showing the absolute price changes of Apple (NASDAQ:AAPL) over the period of five trading days before a significant event, starting at the open on the first day and ending at the close on the final day. The reason for doing this was the imminent arrival of February 23rd (shareholder meeting) and the potential release of the iPad 3.

The result of the calculations showed that there was no distinct trend between such events, however a commenter on the article suggested that these changes should be adapted to include market movements, otherwise they were not necessarily fair assessments of the Apple movements itself.

Following on from this advice I have constructed a second table of movements. This details the Apple movements as before and also the movements of the US Tech 100 and the S&P 500. The Nasdaq was suggested, however given Apple's large weight in it (and increasing weight over the time period), I thought the S&P 500 more appropriate. Apple's relative return has been calculated by subtracting the average of the Tech 100 and S&P 500 from the absolute Apple return. This table can be seen below.

Percentage Return Over Time Period
Shareholder meetings AAPL Stock US Tech100 S&P 500 AAPL Relative Return
17th-23rd March 2011 -4.54% 2.38% 3.21% -7.33%
19th-25rd March 2010 -0.48% 0.34% -0.07% -0.62%
19th-25th March 2009 -2.40% 2.32% 3.01% -5.06%
iPad Announcements
24th February-2nd March 2011 iPad 2 2.18% 0.69% -0.29% 1.98%
22nd-27th January 2010 iPad 1 0.57% -1.66% 1.23% 0.78%
iPhone Announcements
28th September-4th October 2011 iPhone 4S -6.88% -5.77% -4.50% -1.75%
8th-14th July 2010 iPhone 4 -3.72% 3.59% -3.23% -3.90%
2nd-8th June 2009 iPhone 3GS 3.54% 1.57% 0.13% 2.69%
Click to enlarge

This data does indeed provide a different perspective. The impact of shareholder meetings in the past has been a quite considerable fall in the price (particularly last year). Taking this relative return instead of the absolute return however, the fall in price prior to iPhone announcements appear less than before, and for the iPad, the increases in price are not changed very much.

Once again, every situation is completely different, with unique products and economic situations. Past events are by no means an indication of the future, but I felt that plotting the data would be interesting. If nothing else, this data has proved that, particularly before shareholder meetings, the concept of "Buy the rumor, sell the news" is less common than other articles on this site might make out.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.