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Apple Computer’s Stock Price Goes Up After Announcing A $32 Million Loss! News Apple Computer Inc. announced a $32 million, or 26 cents a share, loss for the second quarter compared with a profit of $103 million, or 84 cents a share, for the same period last year. Since the announcement was made after close of trading Wednesday (July 17, 1996), in the after-hours Nasdaq market shares shot up to $20.50, from an earlier close of $16.875.
How Can You Explain This? This should be easy given the above analysis. The market, or the average investor, just have been expecting an even larger loss. Thus, with the announcement, investors revised their estimates of cash-flows upward. Hence the price of the stock should do up.
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