Verizon stock not helped by iPhone, but Apple stock gains

Announcing the Verizon iPhone hasn’t done Verizon stock any favors. Verizon’s iPhone media event really sent its stock down. The inevitability of the Verizon iPhone in the past week has pushed up Apple stock six %. There is no doubt that individuals will be taking out a payday loan to purchase the iPhone from Verizon. Post resource – Verizon stock dives after iPhone announcement, Apple stock soars by MoneyBlogNewz.

From rumor to news with Verizon stock

There was a 2 percent drop in Verizon stock Tuesday afternoon. This was right after the Verizon iPhone announcement that it happened. `The market will reflect the assumption that Apple will benefit while Verizon isn't with the investment. The iPhone with AT&T is what it is following. January 9, 2007 was when AT&T became the exclusive carrier for the iPhone. Now AT&T has gone down 20 percent. People would get a loan to buy Verizon stock when the buzz about a Verizon iPhone started intensifying in October. Verizon shares have risen about 7 percent since then. The "buy the rumor, sell the news" mentality that investors is had is why there is a slump in Verizon shares. This is what the Wall Street Journal explains.

The iPhone hurts Verizon more than it is helping

The stock for Verizon is expected to continue dropping. This is why the 2011 earnings for Verizon may be hurt a little bit by the iPhone. Apple is notorious for using the immense popularity of the iPhone to pressure its vendors for the best deal. In order to get a lot of customers interested very quickly, the iPhone is being subsidized by Verizon. The Verizon iPhone 4 will sell at a lower price than any other iPhone. Verizon customers only have to pay $199 if they want the 16-gigabyte model with a 2 year contract. The 32 gigabyte model only costs $299 also. An analyst told CNBC that Verizon is shelling out about a $400 dollar subsidy for every iPhone it sells.

Apply stock going up

Apple is the true winner when it comes to the Verizon iPhone. The iPhone market share is what drives Apply stock. Apple stock went up 19 percent in the last quarter of 2010 with the Verizon iPhone rumors. From 2 percent in 2009 to 3 percent in 2010 was the iPhone's share of the global smartphone market. The Verizon iPhone could boost Apple’s global smartphone market share to hit 12 percent in the next few years. Even borrowing money to buy Apple stock now is a good debt. The Trefis Team at Forbes estimates that the price of Apple shares could increase another 25 percent from its current market price of about $340.

Citations

CNBC

cnbc.com/id/41022331/

Wall Street Journal

online.wsj.com/article/BT-CO-20110111-710821.html

Forbes

blogs.forbes.com/greatspeculations/2011/01/10/iphone-eats-market-share-pushes-apple-stock-above-470/

Smart Company

smartcompany.com.au/information-technology/20110111-apple-stock-rises-as-rumours-fly-over-ipad-2-verizon-iphone.html