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Will iPhone 15 event help Apple recover $200 bln loss?

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Apple’s iPhone 15 event on Tuesday will boost stock prices for shareholders, but it will not be enough to recover its stock market valuation which fell by more than 6%, or almost $200 bln, in two days last week.

Investors will see a dip in the stock price after reports that Chinese government workers have been banned from using iPhones, said Nigel Green, CEO and founder of deVere Group, a leading independent financial advisory and fintech.

Apple’s new iPhone showcase on Tuesday, dubbed ‘Wonderlust’, is expected to unveil new hardware, including the iPhone 15 and Apple Watch models.

“iPhone events typically generate significant buzz and anticipation, leading to a surge in sales. This in turn will boost stock prices for shareholders in the short-term,” said Green.

“However, we don’t expect it to be enough to recover its full stock market valuation which fell by more than 6%, or almost $200 bln in two days last week.”

“This is not because of the issue of Beijing reportedly banning government workers using iPhones.  The impact of this move has been greatly exaggerated,” he said.

The drop in stock prices coincided with the release of an important rival phone in China, the Huawei Mate 60.

Declining sales

“It also comes at a time when Apple has had three consecutive quarters of declining sales due to the macroeconomic climate in the market, with major headwinds for consumption across the board,” Green added.

“These should be the main reasons stock prices fell last week, not the knee-jerk reaction to a ban that affects only around 500,000 government employees’ phones.

“And as these real reasons remain in the short term, we believe it will be a struggle for Apple to make up the stock market valuation with Tuesday’s event.”

Green said the dip in stock price “will be used by savvy investors as a buying opportunity.”

“The robust fundamentals of the biggest company remain unchanged. It has huge amounts of capital and expertise, dominates the market, and is amazingly adaptable – which is critical.

“This is evidenced by Apple CEO Tim Cook, who, despite being the head of a major US company, has managed – so far at least – to be viewed by Beijing as almost ‘independent’ from the US, which many other major brands haven’t been able to pull off.

“For me personally, Apple remains a ‘buy’.”

Green concluded that, “we don’t expect the iPhone 15 event on Tuesday to rock the world for Apple shareholders, but investors will not be ruling the company out – if anything they’ll be using the volatility as an opportunity.”