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Apple Stock Should Rise with the Ipad Mini – But How Much?

Yes, this is the question. At every new product launch, the Apple stock rises almost automatically in anticipation to the future earnings. In this respect, Apple exhibits something quite close to the perfect market hypothesis – data about future earnings should be incorporated into the stock price at the time of the announcement.
The question is thus not how much will the apple stock rise in the incoming weeks, but how much. In fact, if you make it right, you could do a fortune. Most of the equity analysts are battling and scratching their heads for this question – what will be the impact of the Ipad mini launch into the stock price?
Let us try to do a small calculation here:
Between the launch announcement of the first Ipad (January 27, 2010) and the first sales hitting the stores (typically first two weeks of sales, starting with April 3rd, 2010) the Apple shares rose from $208 to $259 (24.5%). At 4 million units as the first Ipad was to be sold, the impact of each IPad into the 904 million shares was at the time $15 billion (assuming a 1/3rd impact of Ipad from the total results).
The Ipad 2 story is somehow different, in a sense that the market has anticipated the launch of the second Ipad in March and the Apple share price has increased in advance with approximately 30 USD.Following the same logic of calculation, Apple had an IPad 2 impact in its share growth of around 10 billion USD. Again, Ipad 3rd generation had again a stock impact of $15 billion USD. Calculations are shown below:Read More »Apple Stock Should Rise with the Ipad Mini – But How Much?