You might have heard something about Apple’s stock taking a savage beating in the past few months. From a high of $705.07 in September of 2012, Apple has shed about a third of its value – it closed at $430.47 when trading wrapped up on Friday. That’s an incredible fall in just six months – the only more dramatic turn in Apple’s history was its recent meteoric rise.
But, there’s plenty more history to be enjoyed before Apple’s stock wound up in the stratosphere (maybe it’s just in the troposphere now). We’ll take a look at the ups and downs, but we can say one thing now with certainty – if you bought Apple stock at the start, and you still have it now, you’ve still made a whole lot of money.
Note: Historical stock data from Y Charts. Apple’s stock has split 2-for-1 three times (1987, 2000, 2005), meaning 10 shares of Apple at $50 would become 20 shares at $25 with each split. Historical stock charts correct for the impact splits have on stock prices.
Humble beginnings in a garage. Steve Jobs and Steve Wozniak collaborated to build the Apple I, which brought in a slight profit. The two started working on the Apple II, and would officially found Apple Computer on April 1, 1976.
Apple’s IPO was originally set at $14, and debuted on the market on December 12, 1980 at $22 per share. All available shares were bought up about as fast as Coachella tickets, and the stock ended up at $29 at the end of day one. Nearly everyone involved with the founding of Apple instantly became millionaires. Corrected for Apple’s subsequent stock splits, the stock price at the outset here was about $3.59.
After reaching a high of $4.50 (adjusted) on December 29, 1980, Apple stock steadily fell to $1.44 on July 9, 1982. During this time, Apple had to cope with the commercial failure of the Apple III. The power struggle between Steve Jobs and the board of directors began around this time.
Apple stock reversed course, winding up at $7.84 on June 6, 1983. The more affordable Apple II Plus saw strong sales. Excitement over the new Lisa project started to build, despite Jobs having been forced off the project in 1982 - cue ominous music.
The Lisa tanked, and Apple’s stock would tumble, stabilize, then tumble a little more to $1.83 in August 1985. The price stabilized again thanks to legendary events like Jobs’ famous unveiling of the Macintosh and the “1984″-themed Super Bowl commercial. Despite strong sales at the outset, the Macintosh petered out after its 1984 release, and Apple stock slid a little more. Apple’s stock would bottom out during the fall of 1985 before rising again. What happened in the fall of 1985? Steve Jobs, after product delays and what the board of directors saw as expensive pursuits of too-risky projects, was essentially forced out of Apple. He would sell his shares of Apple, buy Pixar, and found NeXT shortly thereafter.
Macintosh and Apple II sales remained stable with appreciable growth, and a new microprocessor was developed under the leadership of CEO John Sculley. Profits improved, and it was all looking good for Apple, which reached a high of $14.81 on October 5, 1987.
Just three weeks later, on October 26, 1987, Apple stock was selling at half that price – $7 per share. Why? Because no one gets through Black Monday unscathed.
Under John Sculley, Apple remained stable, if unimpressive. The Apple II line received updates and continued to bring in decent sales, and the Macintosh line gained traction. During this time, Apple never got back to its pre-Black Monday high, reaching a ceiling of about $11.50 a couple times before falling down and rising again. It wouldn’t sink to Black Monday lows until October 1990, when it would briefly drop below $7. The United States was mired in a recession at the time, and Apple was suffering from many product delays and sales failures.
Apple stock rose sharply as the United States came out of recession, reaching a new high of $18.19 on April 2, 1991. Post-recession stock market growth can do wonders. We’ll revisit that later.
The long, slow decline. From that $17.94 high, Apple’s stock cruised downward at a mostly leisurely pace, bottoming out at $3.31 in July 1997, and languishing for the rest of that year. Almost all of your favorite spectacular failures came out of this era, like the Newton and the Pippin. Stormy waters in the leadership department – three different CEOs (Sculley, Michael Spindler, and Gil Amelio) in this era – brought Apple to its knees.
The most important thing Gil Amelio did as Apple CEO was purchase NeXT bringing Steve Jobs back to the company. In July 1997, Amelio was out as CEO, and Jobs was in. In August 1998, Apple released what represents the beginning of the modern Apple era – the iMac. Mac OS X was also introduced. Apple would climb as high as $34.67 in March 2000, and was at $31.72 coming into September of that year.
Apple’s black Friday was September 29, 2000. After announcing that sales wouldn’t come close to meeting forecasts the day before, the stock lost half its value in one day, dropping from $26.75 to $12.88. Again, those are the adjusted values after taking all of Apple’s splits into account – on that day, the price went from $53.50 to $25.75. It was a bad time for the whole tech industry, thanks to the dot com bust, and Apple would feel the sting of that day for years to come, slogging through the 2001 recession and staying under the $15 (adjusted) level until about 2004.
Apple, and investors, began to realize that Apple had amassed a whole lot of cash thanks in part to the iMac and iPod line. Apple started using that cash to do new things, and find new partners like Intel. The MacBook Pro came into being. The iPod, introduced before this era in 2001, remained a strong seller. The iPhone was announced in a keynote almost (but not quite) as theatric as the Macintosh reveal. It was here when Apple became the Apple we know today. Apple stock had been increasing coming into August 2004, but it was then that growth really took off, breaking through the $15 barrier, passing $100 coming into May 2007, and reaching as high as nearly $200 in December of 2007. Apple stock would be sitting at $169.53 at the end of August 2008.
On October 9, 2008, Apple was all the way down to $88.74, down roughly 50%. Something bad must have gone down in September of two-thousand and ohhhhhh.
Apple stock never sank below $82 during the Great Recession. After 2009, riding the wave of the iPod Touch, the iPhone, the MacBook line – and a wave of post-recession stock market fervor - Apple soared. They took over the premium smartphone market, ousting BlackBerry, and created and dominated the modern tablet market with the release of the iPad in 2010. Shares reached a peak of $705.07 in September 0f 2012, a more than sevenfold increase over its recession low. It would become the most valuable company in the world, worth well over $600 billion. This otherwise brilliant era was marred by one jarring loss – the death of Steve Jobs in October of 2011.
At the beginning of the decade, Apple completed its rise to the top. The only problem with being on top is that there’s only one direction to go from there. Since its high of $705.07, Android has tightened its grip on its lead in smartphone market share. The Samsung Galaxy line became a high-powered rival to the iPhone, eventually supplanting it as the world’s best-selling smartphone. And, the stock market is all about the future – with so much success in the past, future growth appears to be hard to come by for Apple. Today’s $430.47 may be just the beginning of a continued decline.
New markets like China might help growth, but Apple will be facing increasingly stiff global competition, and some of Apple’s almost cult-like mystique inevitably died with Steve Jobs. In order to turn this stock frown upside-down, Apple is going to have to do what it did with the iPhone, iPod, and iPad – essentially, create brand new markets to dominate. Can a Tim Cook-led Apple deliver that one more thing to get investors excited about Apple again? Hard to say, but doing so isn’t going to get any easier anytime soon.
If Apple keeps doing what it’s doing now – releasing the same product with incremental improvements every year - it will continue to rake in handsome profits. But, that won’t get new investors on board. And, why should it? That’s essentially what BlackBerry did, and now the company is struggling to stay relevant. Tech companies don’t exactly have a history of staying up on top long – investors know even Apple isn’t immune.