Apple Shares Plunge On Rumors of iPhone, iPod Problems
Apple shares plunged 7% in heavy trading Tuesday after a report--later denied--that cited production problems with the company's popular iPhone and iPod devices.
The report first surfaced on TheStreet.com, claiming that Apple would reduce production of its iPhone from "9 million units to 4.5 million units, according to a note from Miller Tabak analyst Peter Boockvar.
"The note cites talk among traders at Goldman Sachs and also includes speculation that the cuts may be coming in iPod production," the Web site said.
When CNBC reached Boockvar in his office Tuesday evening, he said the entire incident was based on a misunderstanding.
Boockvar says he was contacted by TheStreet.com's reporter and when asked about the iPhone/iPod production problems, he merely said that he, too, had heard the rumors.
"We weren't issuing any kind of report," Boockvar said. "We don't have an Apple analyst, we don't even have a tech analyst."
"Disregard it," he told AppleInsider. "There's no note on Apple today. It's pure noise."
Another broker on Miller Tabak's trading desk said the "note" was actually a brief correspondence between a single broker and his client discussing the rumors. He said no official "note" or "alert" or any widespread advisory was issued by the firm to its traders or clients.
A spokesman for TheStreet.com couldn't be reached immediately for comment.
The Apple sell-off was reminiscent of what happened when AT&T reported lower than expected activation of iPhones during the first weekend the device was available to consumers.
Apple shares suffered their worst one-day point drop ever that day, but recovered all those losses and then some a day later when Apple reported its own earnings, along with what was widely perceived as a positive outlook for iPhone sales.