Apple loses $9 billion in share buybacks as markets slow down

New York (Jan 8)  Tech giants Apple have reported the loss of $9 billion in 2018 through their share buyback programme. The company set aside $100 billion for this programme, and spent $63 billion in the first three quarters of 2018, but with the US stock markets entering correction territory and even bear markets in places, the value of Apple’s shares has fallen from $222.07 in October to $156.15 in the last fortnight.

The drop means that Apple’s stock value has fallen around 40% from its peak last year, though the strong brand presence is keeping the faithful composed despite concerns aired by Apple’s Chief Executive, Tim Cook. Mr Cook told the Washington Post that the “magnitude of the economic deterioration” in China – whether from the trade war or natural economic slowdown – had caused the sales disruption for the iPhone.

In response to Cook’s comments, Apple’s shares dropped by 10%, with Microsoft, Intel, Cisco, Boeing, Caterpillar, and United Technology also suffering due to their involvements in the Chinese market. As a result, the Dow Jones dropped 2.8%, the S&P 500 dropped 2.5%, and the tech-favoured Nasdaq dropped by 3%.

2019 will be a difficult year for Apple. The share buyback scheme still has some money left in it, so it’s expected to continue through Q4 2018 and into Q1 2019, and it shouldn’t lose much more money given that Apple’s share price has already dropped. What will hinder Apple is the US/China trade war. This is a lengthy dispute now that is causing economic stagnation for most of the world due to trading partnerships with both countries. The slowdown, from consumer caution over higher prices, means that people are less eager to splash the cash on expensive goods like iPhones and Macbooks. They want better value for money, and Apple’s rivals seem to be offering it for now.

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